What would you do

babuseat

Hi,
Was wondering someone would give me their opinion on my situation.

I currently have a mortgage of £127,000. I'm currently in the process of remortgaging and have seen a fixed rate mortgage 3.19 % ( £701 ) for 5 years. I'm currently on santanders svr which is 4.74%(£804 PCM) . So my predicament is this I recently inherited some money and managed to clear all my debts off I.e credit cards/ store cards/ loans. I have however got a loan for£18k balance of £14k (6.1%) n have 5 years left . I also have savings of £53k. My aim is to make sure my children are provided for and was thinking of maybe investing some of the money into property or even shares. So do I pay £17k off my mortgage to get mortgage to £100k and payments to £625 and with the extra money save and pay my tesco loan or pay my loan off.....or what should I do...any advice will be gratefully received

Chyna81

Hi Babuseat,

In my opinion I would pay off the loan of 14k and with the extra money make over payments on your mortgage.

You have mentions you have paid off all over debts and just have one loan, might as well get rid of that also. Then just have your mortgage to deal with.

babuseat

Thanks for that chyna 81 .... Was thinking of that but I know this sounds weird its quite comforting having that money sat in the account even though it's doing nothing...cheers!

getmore4less

babuseat wrote: »

Hi,
Was wondering someone would give me their opinion on my situation.

I currently have a mortgage of £127,000. I'm currently in the process of remortgaging and have seen a fixed rate mortgage 3.19 % ( £701 ) for 5 years. I'm currently on santanders svr which is 4.74%(£804 PCM) . So my predicament is this I recently inherited some money and managed to clear all my debts off I.e credit cards/ store cards/ loans. I have however got a loan for£18k balance of £14k (6.1%) n have 5 years left . I also have savings of £53k. My aim is to make sure my children are provided for and was thinking of maybe investing some of the money into property or even shares. So do I pay £17k off my mortgage to get mortgage to £100k and payments to £625 and with the extra money save and pay my tesco loan or pay my loan off.....or what should I do...any advice will be gratefully received

You have not cleared all your debts.
You still have
£14k(5 years £270pm) loan.
£127k(20/21years £700pm ) mortgage.


Is any of the £53k savings not part of the windfall? If it is you have been borrowing money to save which is not the smartest thing to do.


I would do a proper review of your spending to understand why you had all this debt in the first place.


This will be the best way to prepare for providing for your children.


Pay off the highest rate debts first(checking for penalties) unless you can find other investments that pay more.


Paying off the loan will free up nearly £300pm to rebuild savings/reduce debt.

babuseat

Hi, yes totally get I'm not debt free till my mortgage is paid for...I'm definitely going to pay my loan off( car& home improvements) the 53k is the remainder of my inheritance . Which I didn't know whether to invest in property or shares I.e after paying my loan .... But my aim is to debt free apart from my mortgage

getmore4less

Do you want to become a landlord?

You can invest in your own property by reducing the mortgage.

You had allready decided to invest there as you had debt for home improvmnets.

Did you move your mortgage was much lower a few years back.

tlc678910

I think I would pay off the loan, reduce your mortgage and take a long hard look at your finances before deciding the level of direct debit to make to savings/ premium bonds etc for a rainy day/ saving to help your children. You might be able to save what you would be paying on mortgage and loan inc interest.

Investing in a second property could be a money pit when in the past you have needed to go into debt and take loans without the expenses of this (unless your income or money management has changed significantly since then).

To be honest as we are on a budget I would treat my kids now to a one off modest but fab holiday (uk holiday park or all inclusive cheap and cheerful abroad) after all you have come into some money and memories are priceless. I'm sure some would disagree though!

Ps I just wanted to add if your kids are young/dependent and you don't have life insurance or critical illness cover please make this a priority. My husband and I have 200k (level) life cover for £22 each month (pays on first death).

babuseat

Thank you for your replys..you've definitely made me look at it from a different perspective ....as of an hour ago our big loan has been payed off and our next job is to look at our critical illness policy . Yes u are right tlc memories are priceless and my Aunty would have wanted us to have a nice holiday.
The money we will be saving on our loan £240 and mortgage £100 will now go straight into a savings account... Will be on the savings board after tea ;-). Thanks once again x