Do i go for it???????

hsvqbutr

Hi All

We have just taken a £65k mortgage on a new property, and i have also just recieved a £73k inheritance.

Do i go for it and become mortgage free, or should i save it, or should i offset it.

Its a hard choice to make and i dont want to waste the money, and dont want to make any rash decisions which i will regret later.

Its so hard in fact that ive been thinking about this dilema for the last 8 months as ive known it was coming and i still dont know what to do.

So any input, suggestions and guidence will br greatfully accepted.

Cheers
gary

ash121_2

if the investment options that are on offer for your money e.g investment accounts outweigh the amount that youl be paying in mortgage then go for the investment, otherwise pay the mortgage, either way if it was me i wouldnt pay off the entire mortgage id leave a pillow of say 15k as a safety net, but remember to knock the seller hard as your not in a chain

barron_hard_up

If I were fortunate enough to be in your situation, I would pay the mortgage off. You will save collosal ammounts of money by not paying the interest. Also, once you own you own home you have total security, as long as you don't do anything silly such as secure future debt to it - then again, the whole idea of these boards is to encourage people to be debt free. This is a fantastic opportunity for you, congratulations on this fine windfall.

Dithering_Dad

As you have only just arranged your mortgage, it is highly likely that there will be overpayment restrictions or redemption penalties in place. You need to check if there will be a significant charge to paying off the mortgage before you take any action.

If there is a charge then I would find out how long the redemption period lasts and also find out how much (any anything) you can overpay by. I'd then put my cash away in a high interest account, overpay the maximum you are allowed and then pay off the mortgage completely once the penalty period expires.

If there are no redemption penalties, other than the usual discharge fee, then I would pay off the mortgage completely and then put the remainder of the money into mini cash ISAs. With property values dropping and the stock market all over the place, talk about recessions and credit crunches, etc. our money is better spent in debt repayment (i.e. the mortgage) than in anything else.

lilac_lady

Be mortgage free and debt free. That's real freedom.

ceridwen

I think it would be a shame to waste the fortunate situation you are in - ie being able to get shot of the mortgage - by not doing so. Me - I wouldnt hesitate basically (subject to Dithering Dads proviso about redemption fees). If, say, I had to stick with the mortgage for 3 years for instance not to be charged whacking great redemption fee - then the money would be put the highest interest safe place I could find till exactly 3 years 1 day later - at which time I would hand over the cheque to pay off the mortgage. The other £8,000 will come in handy to go towards the work on the house you will almost certainly have to do - unless its a new house.

Bear in mind how secure (or otherwise) your job is - if there is any doubt at all about it being secure for the next x years till you can pay off mortgage without huge redemption fee - then pay off mortgage anyway. The DHSS wont give full help with mortgage interest on a new mortgage until some months after unemployment commences on the one hand - and only basically allows people to have £3,000 (:eek: ) in savings/capital before they start seeing if they can means-test people out of any benefits due. You DO NOT want to lose your job say one year down the line - and have that large amount of capital sitting there - as you wouldnt get Income Support for quite some time. If you'd spent it on paying off your mortgage on the other hand - then they couldnt touch it (as it would have been safely spent before you realised you were going to lose your job).

Lilac_Lady - couldnt agree more!

firsttimetom

Wow,

Lucky you (although my condolences also, as presumably the person who left that kind of money was close to you).

If it were me, I would pay off the mortgage (or try and cancel it, not sure how these things work sorry) and go on a nice bit of a holiday. Maybe the caribean, first class. Nice Martini in hand on the beach. In the warm. Sounds good to me!!

hsvqbutr

Thanks for your replys, they are a great help in making me decide what to do. Firsttimetom, Thank you very much, The money was left to me by my parents.

The house I purchased was my late parents home, I was in fact born here so it holds great memorys. We moved in 2 weeks ago and it still looks like box city hehehe.

Our mortgage has no redemption fees, as i knew this may be an option in paying it off quickly, so i opted for that as a feature.

At this moment in time Im thinking about offsetting the savings againts the mortgage, as this would be best suited to me (i think) at this moment, as it givesme the option of getting my money back or paying mortgage off outright at a later date, as believe it or not im still undecided (sorry, big decission for me this).

Anyway, if anyone else wants to add there twopennyworth to the log then please do, and to those that have replied, Thank you.

Have a great xmas everyone.

gary

Jonbvn

It is important that you have some rainy-day money. Say 3-6 months income. This money should be saved in ISA's for you and your OH. You can save £3k each this tax year, & £3.6k next tax year, giving you a total of £13.2k.

I believe some banks/BS allow you to offset with part of the money in ISA's.