How to deploy windfall prior to adding to mortgage

bruceiow

Hi All,

I am hoping to move house in the next quarter. We currently are paying a mortgage on our existing property and have about £80k equity on our existing place.

I have received an unexpected windfall of £2k and want to know how best to use it..

So my options as far as I can see:

1) I have a credit card on 0% for another year. I have 4k on it from some uni fees and a large car repair a couple of years back. I haven't spent on it for 6 months and don't intend to. I'm paying over the minimum and will tart it at the end of the 0% period.

2) I have two small car loans, both just under 3k each, both due to finish in 2 years. They are with Natwest and have been there for 3 years. I seem to recall from the bank that I could add partial settlement to reduce the timespan if I wanted to.

3) My wife is paying monthly (direct to the provider) for some course fees, there is less than 2k remaining now.

4) I have a couple of grand savings that is my safety net.

Out of those which would be my best advantage to pay my windfall against? I can pay off a bit of a debt (or small bits from many debts), finish a monthly commitment or add to my savings.

Bearing in mind I am going with my begging bowl to the bank in a minute for a bit more mortgage :beer:

Many thanks!

fewcloudy

bruceiow wrote: »

Hi All,

I am hoping to move house in the next quarter. We currently are paying a mortgage on our existing property and have about £80k equity on our existing place.

I have received an unexpected windfall of £2k and want to know how best to use it..

So my options as far as I can see:

1) I have a credit card on 0% for another year. I have 4k on it from some uni fees and a large car repair a couple of years back. I haven't spent on it for 6 months and don't intend to. I'm paying over the minimum and will tart it at the end of the 0% period.

2) I have two small car loans, both just under 3k each, both due to finish in 2 years. They are with Natwest and have been there for 3 years. I seem to recall from the bank that I could add partial settlement to reduce the timespan if I wanted to.

3) My wife is paying monthly (direct to the provider) for some course fees, there is less than 2k remaining now.

4) I have a couple of grand savings that is my safety net.

Out of those which would be my best advantage to pay my windfall against? I can pay off a bit of a debt (or small bits from many debts), finish a monthly commitment or add to my savings.

Bearing in mind I am going with my begging bowl to the bank in a minute for a bit more mortgage :beer:

Many thanks!

Just checking; the windfall is £2k, you didn't mean to write £20k? (not that there's anything wrong with an unexpected £2000 of course...)

AnotherJoe

Keep the money you will need it for moving expenses.

bruceiow

I wish it was 20k! No just the 2k totally unexpected- I know the effect is likely to be immaterial but I want to use it in the best way.

MEM62

bruceiow wrote: »

I have received an unexpected windfall of £2k and want to know how best to use it.

Holiday?

Thrugelmir

Use the windfall plus some of your savings to clear the most expensive loan completely. The trouble with rolling debt over is that one never ends up clearing it. There'll be yet another large unexpected bill to pay. Breaking the cycle is well worth the effort. As you'll have a lot more money in your pocket.

bruceiow

MEM62 wrote: »

Holiday?

Haha, I've got two in the bag for the year so I'm good for those!

AnotherJoe

Thrugelmir wrote: »

Use the windfall plus some of your savings to clear the most expensive loan completely. The trouble with rolling debt over is that one never ends up clearing it. There'll be yet another large unexpected bill to pay. Breaking the cycle is well worth the effort. As you'll have a lot more money in your pocket.

The OP only has £2k in savings and is moving ina few months.

fewcloudy

bruceiow wrote: »

Hi All,

I am hoping to move house in the next quarter. We currently are paying a mortgage on our existing property and have about £80k equity on our existing place.

I have received an unexpected windfall of £2k and want to know how best to use it..

So my options as far as I can see:

1) I have a credit card on 0% for another year. I have 4k on it from some uni fees and a large car repair a couple of years back. I haven't spent on it for 6 months and don't intend to. I'm paying over the minimum and will tart it at the end of the 0% period.

2) I have two small car loans, both just under 3k each, both due to finish in 2 years. They are with Natwest and have been there for 3 years. I seem to recall from the bank that I could add partial settlement to reduce the timespan if I wanted to.

3) My wife is paying monthly (direct to the provider) for some course fees, there is less than 2k remaining now.

4) I have a couple of grand savings that is my safety net.

Out of those which would be my best advantage to pay my windfall against? I can pay off a bit of a debt (or small bits from many debts), finish a monthly commitment or add to my savings.

Bearing in mind I am going with my begging bowl to the bank in a minute for a bit more mortgage :beer:

Many thanks!

Is there a way you can make use of this website...
http://www.whatsthecost.com/snowball.aspx
just to see what the best use of your windfall might be? Helpful for debt repayment in general I guess?

But yes the rule is to pay off most expensive debt first.

Thrugelmir

AnotherJoe wrote: »

The OP only has £2k in savings and is moving ina few months.

Clearing a loan would enable the OP to rebuild their savings.

There's an old Chinese saying. "A man who wishes to move a mountain starts by moving the small stones first".

getmore4less

I think you need to put a proper plan in place and do a detailed budget for the year with the move in and preferably a 5 year plan/forcast.

bruceiow wrote: »

Hi All,

I am hoping to move house in the next quarter. We currently are paying a mortgage on our existing property and have about £80k equity on our existing place.

I have received an unexpected windfall of £2k and want to know how best to use it..

So my options as far as I can see:

1) I have a credit card on 0% for another year. I have 4k on it from some uni fees and a large car repair a couple of years back. I haven't spent on it for 6 months and don't intend to. I'm paying over the minimum and will tart it at the end of the 0% period.

2) I have two small car loans, both just under 3k each, both due to finish in 2 years. They are with Natwest and have been there for 3 years. I seem to recall from the bank that I could add partial settlement to reduce the timespan if I wanted to.

3) My wife is paying monthly (direct to the provider) for some course fees, there is less than 2k remaining now.

4) I have a couple of grand savings that is my safety net.

Out of those which would be my best advantage to pay my windfall against? I can pay off a bit of a debt (or small bits from many debts), finish a monthly commitment or add to my savings.

Bearing in mind I am going with my begging bowl to the bank in a minute for a bit more mortgage :beer:

Many thanks!

Summary.
You are £14k in debt and planing to move with just £4k in cash.

What's the cashflow and debt going to look like by the end of the year(April-MArch) after the move is complete

The best place to get help on planning is
http://forums.moneysavingexpert.com/forumdisplay.php?f=76