Left house in will. What to do with proceeds?

Makingabobor2

Definitely pay off the mortgage. If I inherit before my mortgage finishes, that's what I will be doing.  What you save on monthly mortgage payments as well as what you save on the CC debts, will give you plenty of extra money each month, Good luck. 

theoretica

I too would pay off the mortgage, and work hard to stop general life and living expenses absorbing more than you want of the payment savings you make - perhaps set up payments into savings accounts equal to what you had been paying on the mortgage and another for what you had been paying to credit cards.   

grayson

enthusiasticsaver said:

I would clear the credit cards and mortgage.  You will still have £18k and no mortgage.  Can you say why you have financially struggled over the years?  Redundancy, low pay or lack of budgeting? If you have not budgeted in the past I would be wary of keeping large amounts in accessible cash without a plan as you may be tempted into  spending large portions of it and then regretting it in a year or so time. 

We financially struggled due to having 3 kids and holidays always went on credit cards. 
2 of my sons have flew the nest now and I was offered a new job last week which is an extra £400 a month. For the first time in our lives we will not have to worry about money. Its just gutting it is due to a relative passing away. 

JGB1955

My husband was made redundant by a High Street Bank 28 years ago.  It was the biggest favour they ever gave him - the lump sum paid off the mortgage and we were 100% home owners at the age of 40.  There is nothing better than being able to pull up the drawbridge and know that you and your family have a secure home.

EssexHebridean

RobM99 said:

My suggestion - pay off credit cards. I think most people would say that! Interest rate is probably horrendous.

That'll leave £50,000. Mortgage £32,000 outstanding. When to pay it off - is there an early redemption fee? You might be able to pay some off without penalty straight away, worth a look, I think.

That'll leave £18,000.  If (IF!) a 90 day notice account pays a bigger rate than the mortgage, is it worth putting it in that for now?

Ensure you have an emergency fund (I suggest £5,000) in the highest-paying easy access you can find, budget some of this for winter fuel bills. Then the remaining - £50 for a bottle of champers to celebrate being mortgage free (Yay!) and £12950 in a one-year bond, 4.4% should be easy to find. That'll pay £570-ish in interest in a year. Ching!

Usual caveat - the above does not constitute financial advice, I'm just suggesting a few (what I think are!) sensible ideas but as ever, the choice is yours.

Ummm….Nope, sorry, but an emergency fund is NOT to be used for known expenses like fuel bills! (Or indeed school uniforms, Christmas presents or anything else that should be being budgeted for monthly!)

OP - I agree with the concept of the emergency fund assuming you don’t already have one  - the £5000 figure  suggested is a good starting point in your position. However, you should be ring-fencing this to ONLY a be touched on in a genuine emergency - so several appliances going wrong in a short space of time for example, suddenly needing a new boiler, or a catastrophic and unforeseen issue with a car which means expensive work or a short-notice replacement. 

I’d also second the votes for paying off the mortgage - it’s a great feeling, we overpaid ours from 5 years in and managed to clear it in 13 years rather than 25 - had we not done we would still have another 6 years to run on it now and with the way the mortgage market is right now I’m very glad we’re not in that position. If you haven’t been overpaying then there is probably a small amount you can pay off immediately - possibly in the region of £3500 - but check what your products terms say on this. (And in any event it may be that you don’t see your share of the money until such time as the fixed term is nearly up anyway, by the sound of it). 

On the credit cards - are you eligible for any 0% balance transfers do you know? If you are then I would personally look at getting as much shifted to those as possible to stop the interest, and then set yourselves a financial plan in place to clear the balances before the 0% periods finish. That way a little more of your inherited cash gets to earn you some interest before it has to go to clearing the debt.

Finally - make sure that you have a proper robust household budget in place and that you are living to that, and put a savings plan in place to ensure that the money you were previously paying to the mortgage and the debt doesn’t just get frittered. You have been handed an amazing opportunity to sort your financial position out without actually (forgive me if this sounds harsh) having to work for it - and often having not “gone through the process” means that people aren’t as mindful of then staying debt-free going forwards. Don’t risk yourselves being back in the same position and with nothing to show from such a generous gift from your relative’s will.

EssexHebridean

grayson said:

enthusiasticsaver said:

I would clear the credit cards and mortgage.  You will still have £18k and no mortgage.  Can you say why you have financially struggled over the years?  Redundancy, low pay or lack of budgeting? If you have not budgeted in the past I would be wary of keeping large amounts in accessible cash without a plan as you may be tempted into  spending large portions of it and then regretting it in a year or so time. 

We financially struggled due to having 3 kids and holidays always went on credit cards. 
2 of my sons have flew the nest now and I was offered a new job last week which is an extra £400 a month. For the first time in our lives we will not have to worry about money. Its just gutting it is due to a relative passing away. 

It’s always a bittersweet mix I think - grateful for their thoughtfulness but with regret over the way that thoughtfulness has come to pass. 

Something to think about going forwards is budgeting (from within income, NOT savings!) for things like holidays - this is something to put money aside for monthly and, quite bluntly, if the money isn’t saved to cover the costs, holidays are an unaffordable expense! 

enthusiasticsaver

grayson said:

enthusiasticsaver said:

I would clear the credit cards and mortgage.  You will still have £18k and no mortgage.  Can you say why you have financially struggled over the years?  Redundancy, low pay or lack of budgeting? If you have not budgeted in the past I would be wary of keeping large amounts in accessible cash without a plan as you may be tempted into  spending large portions of it and then regretting it in a year or so time. 

We financially struggled due to having 3 kids and holidays always went on credit cards. 
2 of my sons have flew the nest now and I was offered a new job last week which is an extra £400 a month. For the first time in our lives we will not have to worry about money. Its just gutting it is due to a relative passing away. 

That is honest and very common.  You could argue the holidays were a way of making memories with your children when they were young so not the worst reason in the world to incur debt.  Of course the best way to pay for holidays is to save for them and presumably you realise that now.  It is good you do not have to worry about money for now.  How close are you to retirement and do you have decent pensions? As you are now getting an extra £400 a month how about starting up a regular saver account? 

squirrelchops2

I would say pay off your mortgage. We became mortgage free due to inheritance when I was 38. Honestly it is the best feeling in the world knowing that whatever life throws at us we have a roof over our head. It has meant that when I was in an awful job that led to me having a mental breakdown that I could just leave. I didn't have to stay in a job that was killing me due to the money. Now I am well and have a job that pays less but I am happy.

Tigsteroonie

As a PP said - pay off the mortgage and you then have options with regards to work. Lose your job for whatever reason? No mortgage payments to worry about. Change of work environment and you start hating going to work? Take that dream job working elsewhere but for less money. Life throws sh*t  at you and you need to start caring long-term for a loved one? You may be able to go part-time or even give up working.

alan_d

I had exactly this scenario 3 years ago, inherited some money which was enough to pay off mortgage.
So I did. Since then, the interest rates have gone up, and I feel I dodged a bullet.
Was just talking to a neighbor in an identical house the other day, and he's struggling because of the increased interest.
You won't regret it.