What to do with my inheritance?

CHlHlRO

OK, so I've inherited an amount of cash and a property from my mother. What should I do with it? Or where should I go for advice?

The cash is a bit over £17K now that the funeral bill has been paid. The property has been valued at £115K. We (me, OH and 2 kids) currently rent our home but don't want to move into the property as it a) needs a lot of work doing and b) isn't local, so would mean big upheaval in terms of schools etc. I have a pre-1988 student loan and a credit card debt that isn't currently accruing interest. I know you're supposed to pay off high interest debts, but mine aren't, so I'm not sure what's best. Everyone I know seems to be suggesting buying a house using proceeds from the sale of mum's house as a deposit and getting a mortgage for the rest, but is that the best way to go? Any pointers appreciated, thanks 🙏

Cheeky_Monkey

That would seem like the obvious solution.

Unless of course you want to continue renting yourselves at the same time as renting out your mum's house and becoming landlords.

phill99

Well what else will you do with the money?


It seems logical to use it to springboard your way out of a rental property which has very limited security of tenure into home ownership. Clear you debts first as mortgage companies like that!


To me its a no brainer.

tacpot12

Owning a property does bring some extra costs that you don't have as a tenant (life insurance, buildings insurance and maintenance), but providing any new mortgage is about £100 less per month than the rent you are paying, you'll be able to cover these costs easily.

Residential property is a quite a good investment, alternative investments carry more risk.

What concerns you about buying a property?

If you do get a mortgage, make sure you get life insurance and income protection insurance for the wage earners who will be paying the mortgage. That way, if any happens you will still be able to live in the hours.

CHlHlRO

Renting out mum's is probably out of the question, given the amount of work the house needs coupled with our lack of experience etc.

I'm scared of buying a house simply because I've never done it before! Obviously there are fees involved but is it better to use as much of the proceeds of sale as possible as a deposit, or put up a smaller deposit and stick the rest in savings or something like that?

G_M

* has Probate been granted?
* are you the sole Beneficiary?
* who are the Executers/Administrators of mum's Estate?
* is the property still in mum's name and in the hands of the Executers, or has it been transferred into your name?

As you have a job and family it sounds like you are 'settled' (as opposed to being tempted to throw the cash at a 2 year round-the-world trip), so yes, buying a property sounds like a good idea.

Do you have a pension? Investing for that is also something to consider.

TBagpuss

CHlHlRO wrote: »

Renting out mum's is probably out of the question, given the amount of work the house needs coupled with our lack of experience etc.

I'm scared of buying a house simply because I've never done it before! Obviously there are fees involved but is it better to use as much of the proceeds of sale as possible as a deposit, or put up a smaller deposit and stick the rest in savings or something like that?

I'd suggest that you speak to an independent mortgage adviser to get a realistic idea of what you may be able to borrow, and what the monthly payments would be.

If you would be able to buy a property with a mortgage you can comfortably afford, without using all of the funds, then putting some of the funds into pensions or other investments may make sense, but it depends a bit on how much it would cost you to buy somewhere, and what the mortgage costs would be compared with your current rent.

If you don't already have any savings then it would be sensible for you to retain some of the cash as savings, so you have an emergency fund. Your credit card isn't currently incurring interest - do you have funds set aside to pay it when the interest free period comes to an end? If not, using some of the inheritance for that may be sensible.

Keep_pedalling

First priority should be to sell the house (assuming probate is complete) . Leaving an property unoccupied for any length of time is a risk. Once you have done that start looking at purchasing your own place.

CHlHlRO

I'm waiting for the grant of Probate to be returned. Did it myself. She died intestate and I'm the sole beneficiary under those rules. The house is still in her name.

I work in the public sector so just pay into employer's pension scheme. OH pays into his private company pension.

We could use a new car (I say 'new', I mean 'new used') but otherwise there's nothing we want to fritter money away on. Maybe a family day out when all this stress is over, but we could afford that out of our General budget, tbh.

My credit card isn't in a zero interest period, they transferred it to a debt collection agency. Interest was stopped some time ago and I've only been making token repayments. It just got forgotten about and they didn't bother chasing it until last year—It's a long story that's possibly better off in a different thread. My gut feeling is that paying this debt off is vital. And I really want to see the back of it! I'm not so sure about the student loan, although that seems sensible. I've always deferred repayments on that due to not meeting the income threshold.

I (and OH) will definitely be speaking to a mortgage advisor to see what we might be able to borrow. Our rent is quite low (480) but only because we've stayed in the same place rather than find a bigger one, which we probably could have afforded if we'd been a bit more savvy with our finances between babies. Is now the right time to sort out everything we've been putting off, like switching energy providers etc? i obviously don't want to dent my credit any more than it already is!

theone999

CHlHlRO wrote: »

OK, so I've inherited an amount of cash and a property from my mother. What should I do with it? Or where should I go for advice?

The cash is a bit over £17K now that the funeral bill has been paid. The property has been valued at £115K. We (me, OH and 2 kids) currently rent our home but don't want to move into the property as it a) needs a lot of work doing and b) isn't local, so would mean big upheaval in terms of schools etc. I have a pre-1988 student loan and a credit card debt that isn't currently accruing interest. I know you're supposed to pay off high interest debts, but mine aren't, so I'm not sure what's best. Everyone I know seems to be suggesting buying a house using proceeds from the sale of mum's house as a deposit and getting a mortgage for the rest, but is that the best way to go? Any pointers appreciated, thanks 🙏

as a young person currently renting, and paying off the mortgage of a bloodsucking older BTL parasite. I suggest you stop renting as soon as possible. For you, that is like 6 months away.

getmore4less

CHlHlRO wrote: »

Renting out mum's is probably out of the question, given the amount of work the house needs coupled with our lack of experience etc.

I think that answers the main question keep or sell.

you don't want it to live in(or I guess a second/holiday home).
you don't want to become a landlord.


I really can't see any good reason to keep the place so if sure then start the selling process NOW

Work on clearing and staging, pick your EA.

If the application for the grant has gone in get it on the market ASAP you don't have to wait

You can decide what to do next once you know how much you really have to play with.

that will depend on a lot of variables like current rent, the cost of the sort of places you would like to live in, any plans you could have like better area for better schools etc, job security, ages of everyone.
along with other things that could improve your quality of life.

in most cases securing a home is likely to be the best option long term, but there is a balance between going all in for the biggest/best place or something very comfortable and still have some cash available to do stuff.