What to do with the cash

Lady_S

Hiya,
I need some help for my mum.

She has 40kish inheritance coming to her very shortly.

She has a morgage of 37k, and no other savings.

What is the best way to make this money work for her. She is concerned about paying the morgage off completely and it leaving her disadvantaged, she is also worried about having to pay somewhere to look after the deeds for the house.

Would it be best to offset the morgage against the savings, or pay off the majority and offset the rest?

Any ideas would be appreciated. At the moment she has a variable rate morgage with the c and g, and pays approximately £500 a month ( including insurance). There is no overpayment penalty, or ERC on it.

ailuro2

It depends on interest rates, your Mum's age- if she still has pension/retirement planning to consider, how good she would be at not frittering away the money if it was accessible to her, whether she currently pays tax etc.

I'm a fan of overpaying on mortgages- she could pay off a large chunk and keep a little for herself- I like the 10% rule for money that came from somewhere other than an employer- spend 10% invest the rest.

Perhaps she'd like to get round to that long promised trip to see rellies in Australia, for eaxample? Still have enough left to almost clear the mortgage,if that's what she wants.;)

Lady_S

She is 55,and she has a pension through work, but nothing else.

Emmzi

Personally I would pay it off and enjoy my extra £500 a month, and the peace of mind of knowing it's done with. It does rather depend on whether she has unfulfilled dreams she'd like to use the money for, or any 'emergency' savings put by.

In the olden days it used to be possible to leave a pound or two outstanding so the bank kept the deeds.

Martinslovechild

Depending on how long she's lived in her current property, it's worth checking that she actually requires paper copies of deeds as they tend to be held electronically these days.

As for me, I agree with Emmzi - pay off the mortgage and take a good holiday. Australia is an excellent start, but New Zealand is definitely on the '100 places I must visit during my lifetime' list.

You never know what's around the corner. I lost my mother to cancer at the bright old age of 60. Your mum should consider doing the things that she's always talked about but put off because of putting others' considerations first.

sweepster

hiya,
I work at nationwide at we keep £1 on the mortgage so its still open and we look after the deeds for you. Hope this helps
sweepyxx