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Using inheritance to become mortgage free
jenster2752
Posts: 2 Newbie
Hi all. I am lucky enough to be coming into some money to the tune of £100k. Hubby and I are debating how to use this money to it's best. Here's our scenario:
We have a rental property with an existing mortgage of (conveniently) £100,000. This yields a rent of £725 pcm which just about covers the mortgage of £698 per month. Time left on this mortgage is 18 years.
We also have a mortgage on the house we live in of £177,000 with 22 years left to run.
We can either stay as we are and spend the money on work on the house and keep the rest in our offset mortgage account on our main residence or we can pay off the mortgage on the rental property and use the £725 pm rent (keeping a bit back for repairs etc) to overpay our mortgage with the possibility of being mortgage free within the next 11 years......allowing us both to be able to wind down, go part time or whatever at the ripe old age of 52, something we never dreamed of having no gotten on the property ladder til we were in our 30s!
Neither of us is into "stuff", we would like to do some work on our current house but it doesn't all have to be done NOW.
Just wonder if you guys think this is a plan or whether you would do something differently?
If I work til I'm 63, I will have a full Police Staff pension. Hubby is self-employed and has no pension at all.
We have a rental property with an existing mortgage of (conveniently) £100,000. This yields a rent of £725 pcm which just about covers the mortgage of £698 per month. Time left on this mortgage is 18 years.
We also have a mortgage on the house we live in of £177,000 with 22 years left to run.
We can either stay as we are and spend the money on work on the house and keep the rest in our offset mortgage account on our main residence or we can pay off the mortgage on the rental property and use the £725 pm rent (keeping a bit back for repairs etc) to overpay our mortgage with the possibility of being mortgage free within the next 11 years......allowing us both to be able to wind down, go part time or whatever at the ripe old age of 52, something we never dreamed of having no gotten on the property ladder til we were in our 30s!
Neither of us is into "stuff", we would like to do some work on our current house but it doesn't all have to be done NOW.
Just wonder if you guys think this is a plan or whether you would do something differently?
If I work til I'm 63, I will have a full Police Staff pension. Hubby is self-employed and has no pension at all.
0
Comments
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Purely from a tax point of view, my vote would be to pay off own house mortgage as interest on rental property can be claimed against tax.
But the decision has to be a personal one.Made it to mortgage free but what a muddle that became
In the event the proverbial hits the fan then co-habitees are better stashing their cash than being mortgage free !!0
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