Recently widowed, do I pay off the off-set mortgage?

rve1023

Hello

I was widowed in March of this year. My husband and I had a joint off-set mortgage account, which was also our bank account. I have changed the account now solely into my name. There has been various monies paid to me from pensions and insurance. The off-set is actually now in credit. Do I actually pay the mortgage off, or should I move the money leaving the mortgage balance in arrears as it was before my bereavement and continue to pay the mortgage off (providing the lender is happy for me to take over the mortgage solely) or should I pay off a large part of the mortgage leaving a small payment each month, again providing the lender is happy for me to do this. Then what do I do with the rest of the money? Where will I get the best return on approx £80k? I have 2 children, one of 16 the other is 9. Any advice will be take as such and not as gospel this is what I must do.

Thanking any responders in anticipation

egoode

Personally I wouldn't make any big decisions about what to do with the money yet while you are still mourning your husband. At most I'd make sure none of your accounts are over the £85k government guarantee and just find the best interest you can for the moment. I certainly wouldn't make big decisions about locking money away or paying off your mortgage fully until you've had more time to get used to your change in circumstances.

anselld

It depends on the mortgage rate and what else you would consider investing the money in.

If it is a low rate tracker offset (First Direct etc) you can probably move the money to another account where the interest (net of tax) exceeds the mortgage rate.

If you can't do that then there is still no point paying off the mortgage as there may be a time in the future where net savings rates exceed your offset rate.

You have the flexibility to draw down the offset and invest elsewhere or vice versa at any time as rates dictate. A useful facility to draw capital at any time. Absolutely no point paying it off.

kidmugsy

rve1023 wrote: »

Where will I get the best return on approx £80k?

Part of the £80k could be put into the loss-leader interest-bearing current accounts on offer at the moment from, e.g. TSB, Lloyds, Santander, Nationwide, and others. There are pretty regular posts on this topic on the "Budgeting and Bank Accounts" forum.

I agree with the advice that it's wisest not to make irreversible decisions so soon after your husband's death.


Condolences, and best wishes.

dimbo61

Well you can put £15,000 in cash ISA,s
No point having more money in the offset than you owe on the mortgage.
You need a full review of what you will receive from your husband,s employer, what you can claim from the state CTC, WTC, CB etc.
How best to provide for the kids and yourself.
Do you work full/part time?, family for childcare ?
So many questions, are you on a fixed offset with ERC,s to pay if you paid off the mortgage today ?
Pensions , career, savings
Maybe a good idea to speak to CAB or husband,s employer or IFA.
You may lose out on benefits if you have more than £16,000 in the bank.
Good luck

Thrugelmir

You'll need to switch the mortgage into your name. So book an appointment and establish what the position is.

tlc678910

I'm sorry for your loss rve.
I hope that your post prompts those of us with dependants to reflect on our own life insurance & critical illness arrangements and whether we could cope financially/ provide for our kids at such an awful time.

getmore4less

Check what rate you get on credits.

Check the rate on the mortgage.

What term is left.

What level of surplus income do you have to service debt or start saving.

Don't do anything in a hurry.

Having the account at Zero balance should be costing nothing so just gives access to cash at the mortgage rate which if a good rate is worth keeping.