mortage or credit card

mrsr

Hi There
I could do with some advise ,my father died a couple of months ago and I am about to be given 50,000 from his will .My question is am I better to pay all this off the mortage which would leave 26,000 or pay off 40,000 and 10,000 to clear credit cards .The credit cards are all on 0% for twelve months but i think the payments on that 10,000 are proberly higher than it would be on the mortage ,this would free up more money each month.We have had a bad year OH lost his job last July and has only just found a job with the same salary ,its going to take a while to get back on top again so the more spare cash the better.OH thinks paying credit cards off then rest on mortage is the way to go Im not sure after the scare last year i am thinking the less we have on mortage to pay the more secure we will be if anything happens ,the credit cards cant take our home.Anyway your thoughts would be very welcome

momisa

Hi msrs

Does the £50k include any inheritance tax that you may be liable for? potentially daft question but I've never been left anything in a will.

With regards to your mortgage - what T&Cs do you have? If you're on a special rate (discounted or fixed) you may be penalised for paying a huge whack whilst in the deal. I'm currently in the process of remortgaging to a 2 yr fixed deal and can overpay 10% each year but if I pay more I'll be charged for it!!

I'd take advantage of the 0% deals you have on the credit cards and pay the minimum on them until the end of the 12 months, but maybe think about putting some money into a high interest savings account until the end of the deal to make your money work for you.

Do you have your mortgage payments protected in case you or your OH are long term ill or made redundant? If not, now would be a good time to consider that - I pay around £20 pcm for cover which is well worth the peace of mind after I was made redundant!!

I also think that whoever is leaving the money to you is doing so because they want you to enjoy it and with that in mind I'd give serious thought to a very cheap and cheerful holiday for a week or two!! You both deserve it

HTH

mrsr

Thanks for that my sister and I have have been given this money each so when my mother dies we wont have to pay inheritance tax its something the solicitor added to the will.I dont think we have a special rate now so hopefully wont lose anything by paying off some mortage.We had to take out some sort of cover for sickness as OH suffers with Asthma nothing for being redundant thats certainly seems a good idea last year was a real shock we only hung onto are home by making big cutt backs me doing two jobs and my wonderfull children giving us what they could spare .