Advise on what to do once MF

bescotboy

I hope to be mortgage free next year (2015). I have been making regular overpayments to the max amount before redemption penalties.

I will be 38 next year and already have works pension in place, but can't draw it until I'm 68 without losing a lot of my pension.

Just looking for advise on what I should do once I'm mortgage free. A few ideas I have:

1) Enjoy the money. Spent it and live life with more luxury.
2) Free equality from house with Let to Buy and buy a new, bigger house and rent my current house.
3) Buy AVC to enhance pension
4) Save into ISA

Beckyy

I don't know much about pensions at all so can't really help in that area. I do think you need a good mix of cash, pension and property for a healthy retirement though so I can't imagine any one of your options is the only thing to go for.

I am a landlord and have done 2.) paid off a mortgage, purchased a new house for myself and remortgaged previous house with a BTL mortgage and rented it out. There are a lot of hoops to jump through to become a good LL and find good tenants though.

If you're happy where you live I would be more inclined to remortgage/borrow more from your current lender and use that as a deposit for a BTL. A 40% deposit should get you a good interest rate and enough equity that you make a little each month above your mortgage interest payments. You're then able to buy the most rentable/needed property in an area of your choice to let out.

bescotboy

Thanks Beckyy. I hadn't considering staying put, but free equality to do a BTL. The whole renting business does scare me a little, but I'm prepared to do my research and do things right.

I might have a year of "madness", enjoying my extra cash - sort of like a reward for the years of my hard saving and hard work and then look into housing market.

Thanks for the advise.

edinburgher

Sorry to be cheeky, but it's 'equity'

If you talk to anyone for advice you may confuse them!

Well done on the looming MFness.

bescotboy

Lol. My bad. I did mean equity. That would have confused the mortgage advisor.

want_to_save

Hi

I will be MF in 1 month 18 days (can you tell i am counting ) my plan is to up my OH pension contribution and save the rest in isas/savings... i wont miss it as i have been paying out the mortgage amount monthly and now gonna put it to good use.

My plan was always to be MF by the time i am 40 and i am 39 this year so ahead of schedule

of course before upping savings etc gonna go out for a nice slap up meal

Good luck on your MF journey

bescotboy

Thanks for advise and ideas.

Can't wait until next year. Hard to believe I will be MF before I'm 40 - no one on my family has done that before.

Think I may do a mixture of ISA, AVC and invest in property.

Hopefully I can then retire at 60, not 68 like the government wants!