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    • mjkyorkshire78
    • By mjkyorkshire78 9th Feb 18, 9:52 AM
    • 2Posts
    • 0Thanks
    How Should I Use a Lump Sum "Gift"?
    • #1
    • 9th Feb 18, 9:52 AM
    How Should I Use a Lump Sum "Gift"? 9th Feb 18 at 9:52 AM
    I got divorced in 2015 and have been left with substantial marital debts (five figures) that I'm slowly digging myself out from under.

    I'm currently renting but I'm struggling to find suitable properties for me and my daughters within my budget and in the required locations. My current tenancy runs out in September, and I'll be definitely moving, my existing property has a number of issues that the landlord and estate agent aren't really dealing with so I'm not staying there.

    My parents have offered me a "gift" to help me out, their hope is that I can get on the property ladder, but I'm not sure what my best option is. The money they have would be enough for a deposit for a suitable small house, but not enough to clear my loan.

    The way I see it these are my potential options...
    1- take a chunk out of my loan and lower my monthly payments and save the rest for a deposit
    2- take a chunk out of my loan and pay off sooner, then start from zero towards a deposit
    3- use the money for a deposit and continue to pay off my loan

    Does anyone have any thoughts, observations, experience or advice on this please?
Page 1
    • fatrab
    • By fatrab 9th Feb 18, 11:04 AM
    • 722 Posts
    • 1,539 Thanks
    • #2
    • 9th Feb 18, 11:04 AM
    • #2
    • 9th Feb 18, 11:04 AM
    It always makes sense to pay the debt with the highest rates of interest first.

    Personally I'd say pay the loan off first, but if the gift is specifically for the purpose of a deposit then you may want to consider how your parents will feel if they see you using the money for anything other than that.

    Welcome to the forum
    You can have results or excuses, but not both.
    Wannabe debt free by Dec 2022 - Wannalose 3st in the process - 1st 11lb lost so far
    April's Goals - 14/21 NSD - 14/20 Lunches - 19/28 AFD - 20/31 TAFD (take away free days)
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    • Silver Queen
    • By Silver Queen 9th Feb 18, 11:05 AM
    • 326 Posts
    • 1,594 Thanks
    Silver Queen
    • #3
    • 9th Feb 18, 11:05 AM
    • #3
    • 9th Feb 18, 11:05 AM
    My first thought is this - are you going to be able to get a mortgage with your current level of debt? If not, option 3 is out of the picture.

    I'd either go 2 or 3. Depends on the size of debt, size of deposit, how long it will take you to save up a deposit all over again...many different factors need to be taken into account.
    Debt Totals April 2018::
    350 Natwest Credit Card / Now 0 (paid off and closed 04/2017) 15,500 postgrad loan from parents/ Now 10,500 500 train ticket loan from parents / Now 0 (paid off 16/02/18) 2,000 Overdraft Now 0 (paid off 09/03/18)
    • a_silver_lining
    • By a_silver_lining 10th Feb 18, 7:39 AM
    • 187 Posts
    • 594 Thanks
    • #4
    • 10th Feb 18, 7:39 AM
    • #4
    • 10th Feb 18, 7:39 AM
    Have you been paying down the debt over the years or ever stalled paying or taken on more debt?

    Do your parents know about the debt, and if so how would you feel explaining to them the total and your monthly repayments in order to discuss whether they would be happy for their gift to be spent on the debt?
    19/12/14: Spent 10 years of savings!!
    ..... to buy my first home.

    2018: 900 savings, 795 emergency fund--- Family Loan 4500/10K paid 45%

    #38 1% Challenge: 514.70/ 2018, now at 25%!
    • bamgbost
    • By bamgbost 10th Feb 18, 6:23 PM
    • 241 Posts
    • 69 Thanks
    • #5
    • 10th Feb 18, 6:23 PM
    • #5
    • 10th Feb 18, 6:23 PM
    as has been previously alluded to.
    depending on the size of the debt, you may not be able to get a mortgage anyway.

    2ndly, have a word with your folks. and let them know that the debt is weighing you down, and can you use their help to clear that?
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