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    • magic79
    • By magic79 12th Oct 18, 8:02 PM
    • 13Posts
    • 4Thanks
    magic79
    Pay Off Mortgage or Invest or Something?
    • #1
    • 12th Oct 18, 8:02 PM
    Pay Off Mortgage or Invest or Something? 12th Oct 18 at 8:02 PM
    Hey y'all,

    Sorry if this question is in the wrong section, please let me know if I need to move it.

    So i've been working on this well paying contract in the Middle East for the last couple of years, just saving away, and now i have some decent savings (almost 92k). It's just sitting in the bank at the moment so realised it really should be put to better use somehow...

    My question to the forum is, should i just use it pay off my mortgage (63k remaining over 22 years) or so use it invest elsewhere? I quite like the idea of getting a BTL property, then there's bonds and shares etc, but i don't really know a lot about that. Oh and i currently do not have a pension place in place.

    Should i go see a financial advisor? Is my situation relevant for that kind of thing?

    Any advice is welcome, as i'm pretty clueless. Thank you!
Page 1
    • ColdIron
    • By ColdIron 12th Oct 18, 9:03 PM
    • 4,729 Posts
    • 6,195 Thanks
    ColdIron
    • #2
    • 12th Oct 18, 9:03 PM
    • #2
    • 12th Oct 18, 9:03 PM
    Oh and i currently do not have a pension place in place.
    Originally posted by magic79
    Put that at the top of your list
    • Peelerfart
    • By Peelerfart 12th Oct 18, 9:07 PM
    • 1,966 Posts
    • 1,705 Thanks
    Peelerfart
    • #3
    • 12th Oct 18, 9:07 PM
    • #3
    • 12th Oct 18, 9:07 PM
    Married, dependants, working if not, prospects of starting any time soon? Are you returning to the middle East?
    Space available for rent
    • magic79
    • By magic79 12th Oct 18, 10:06 PM
    • 13 Posts
    • 4 Thanks
    magic79
    • #4
    • 12th Oct 18, 10:06 PM
    • #4
    • 12th Oct 18, 10:06 PM
    Put that at the top of your list
    Originally posted by ColdIron
    Okay, i'll look into it. Been meaning to do that to be fair. Won't require me using up my saving though? Or does it? Actually i'll look into it first so i know whats what.
    • atush
    • By atush 12th Oct 18, 10:09 PM
    • 17,250 Posts
    • 10,818 Thanks
    atush
    • #5
    • 12th Oct 18, 10:09 PM
    • #5
    • 12th Oct 18, 10:09 PM
    So i've been working on this well paying contract in the Middle East for the last couple of years, just saving away, and now i have some decent savings (almost 92k). It's just sitting in the bank at the moment so realised it really should be put to better use somehow...
    in general, not having the answers to above questions- you have in someways already missed the boat.

    In either investing (would be my choice) or paying of mtg (all dependent on the mtg rate you are paying and any rental income received.

    do let us know the details
    • magic79
    • By magic79 12th Oct 18, 10:26 PM
    • 13 Posts
    • 4 Thanks
    magic79
    • #6
    • 12th Oct 18, 10:26 PM
    • #6
    • 12th Oct 18, 10:26 PM
    Married, dependants, working if not, prospects of starting any time soon? Are you returning to the middle East?
    Originally posted by Peelerfart
    Single, no kids, no debts (aside from the mortgage), working abroad has made it hard to settle down but that's another story lol.
    Yep, i'm still working in the M.E. on a rotational basis, for time-off i'm back in the UK. I'll be doing this job at least until May next year when my contract is complete. Between May and now I should be able to save another 45k, rough estimate. Which could be put it something too; i'm going to look into pensions and see how much is worthwhile putting in.
    • magic79
    • By magic79 12th Oct 18, 10:48 PM
    • 13 Posts
    • 4 Thanks
    magic79
    • #7
    • 12th Oct 18, 10:48 PM
    • #7
    • 12th Oct 18, 10:48 PM
    In either investing (would be my choice) or paying of mtg (all dependent on the mtg rate you are paying and any rental income received.

    do let us know the details
    Originally posted by atush
    What would you invest in?

    Well based on my current mortgage, for 22 years, its £15k worth of interest. To pay it off early, like today, the fee is £2700. Gotta wait 4 more years until it's fee free.
    • kidmugsy
    • By kidmugsy 13th Oct 18, 12:11 AM
    • 11,773 Posts
    • 8,291 Thanks
    kidmugsy
    • #8
    • 13th Oct 18, 12:11 AM
    • #8
    • 13th Oct 18, 12:11 AM
    Pensions are devices for avoiding or deferring tax. Are you liable for UK income tax at the moment? If not, you might want to look at other ways of saving for retirement.
    Free the dunston one next time too.
    • magic79
    • By magic79 13th Oct 18, 11:52 AM
    • 13 Posts
    • 4 Thanks
    magic79
    • #9
    • 13th Oct 18, 11:52 AM
    • #9
    • 13th Oct 18, 11:52 AM
    Pensions are devices for avoiding or deferring tax. Are you liable for UK income tax at the moment? If not, you might want to look at other ways of saving for retirement.
    Originally posted by kidmugsy
    No i do not currently pay income tax, i'm out of the country too much.
    What other ways of saving for retirement are you referring to please?
    • jimjames
    • By jimjames 13th Oct 18, 1:03 PM
    • 12,775 Posts
    • 11,476 Thanks
    jimjames
    What would you invest in?

    Well based on my current mortgage, for 22 years, its £15k worth of interest. To pay it off early, like today, the fee is £2700. Gotta wait 4 more years until it's fee free.
    Originally posted by magic79
    Definitely wouldn't pay it off if you're getting hit with fees.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • magic79
    • By magic79 13th Oct 18, 1:28 PM
    • 13 Posts
    • 4 Thanks
    magic79
    Definitely wouldn't pay it off if you're getting hit with fees.
    Originally posted by jimjames
    At first i thought the fees would be a waste, but i think the fee is equivalent to the amount of interest that is going accumulate between now and the end of the my 5 year fixed term. So either way i'm paying it, if i understand it right.
    • jimjames
    • By jimjames 13th Oct 18, 5:26 PM
    • 12,775 Posts
    • 11,476 Thanks
    jimjames
    At first i thought the fees would be a waste, but i think the fee is equivalent to the amount of interest that is going accumulate between now and the end of the my 5 year fixed term. So either way i'm paying it, if i understand it right.
    Originally posted by magic79
    Except if you pay the fees up front then you no longer have that money and are paying out interest. If you keep the money until the fee is no longer due then you'll be able to earn interest on the money or get investment growth on it rather than starting from zero again.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • planteria
    • By planteria 13th Oct 18, 6:03 PM
    • 5,026 Posts
    • 1,116 Thanks
    planteria
    Well based on my current mortgage, for 22 years, its £15k worth of interest. To pay it off early, like today, the fee is £2700. Gotta wait 4 more years until it's fee free.
    Originally posted by magic79
    i definitely wouldn't do that. perhaps you could pay the mortgage right down, but just leave it in place for the 4 years?

    but rather than that, i would probably leave the mortgage in place for now and just invest all you can: set up a Pension and a S&S ISA. you are making enough money to be able to both invest and clear your mortgage simultaneously, going forwards.
    Last edited by planteria; 13-10-2018 at 6:06 PM.
    • Zero Sum
    • By Zero Sum 13th Oct 18, 7:01 PM
    • 540 Posts
    • 432 Thanks
    Zero Sum
    No i do not currently pay income tax, i'm out of the country too much.
    What other ways of saving for retirement are you referring to please?
    Originally posted by magic79
    What rate you paying? As you could be better off putting overpayment money into regular savers & fixed term bonds. Ive got 25% of the value of my mortgage (which is earmarked to overpay/pay off) in fixed rate account instead paying 0.4% more than mortgage which matures the same time as mortgage deal is up. On top of that getting 5% on regular savers instead of over paying regulary
    • astedman
    • By astedman 13th Oct 18, 9:39 PM
    • 3 Posts
    • 2 Thanks
    astedman
    Should i go see a financial advisor? Is my situation relevant for that kind of thing
    Originally posted by magic79
    Absolutely. Asking here is asking for financial advice and people should really be qualified to answer. I worked offshore for many years in the O&G industry and have a great FA, if you’d like to have their number just send me a message and I’ll share.

    Thanks,

    Alex
    Last edited by astedman; 13-10-2018 at 9:41 PM.
    • kidmugsy
    • By kidmugsy 13th Oct 18, 9:57 PM
    • 11,773 Posts
    • 8,291 Thanks
    kidmugsy
    No i do not currently pay income tax, i'm out of the country too much.
    What other ways of saving for retirement are you referring to please?
    Originally posted by magic79
    I don't know enough about expats to give you a useful answer. What you need is an IFA ("I" = Independent i.e. not a salesman) who is expert at this game - preferably knowing about both the UK tax regime and the tax regime of the country you earn in.

    I wouldn't be surprised if you ended up investing in Stocks and Shares via a jurisdiction such as Jersey, Guernsey, Isle of Man, Bermuda, or the like. But that's just a blind guess.

    My own suspicion is that S&S are so highly valued, especially in the US, that they could be heading for real trouble. So in your shoes I'd ask my IFA to discuss some non-equity investment too - which might well include paying down your mortgage as quickly as you can without attracting penalties.
    Free the dunston one next time too.
    • Zero Sum
    • By Zero Sum 13th Oct 18, 9:59 PM
    • 540 Posts
    • 432 Thanks
    Zero Sum
    Absolutely. Asking here is asking for financial advice and people should really be qualified to answer. I worked offshore for many years in the O&G industry and have a great FA, if youíd like to have their number just send me a message and Iíll share.

    Thanks,

    Alex
    Originally posted by astedman
    Dunno mind. I once went for a mortgage with an FA & he was clueless. Have had a debate with someone claiming to be an FA on another forum (again mortgage related) and advice they were dishing out was really worrying.

    I do think this place does offer up some good advice by people with a bit of hands on experience.
    • bd10
    • By bd10 14th Oct 18, 12:13 AM
    • 43 Posts
    • 16 Thanks
    bd10
    Unless you cannot get returns in excess of the mortgage interest rate, overpaying or paying it down early makes little sense in my opinion. Mortgage interest rates are still the cheapest in town.
    • magic79
    • By magic79 14th Oct 18, 1:53 PM
    • 13 Posts
    • 4 Thanks
    magic79
    f you keep the money until the fee is no longer due then you'll be able to earn interest on the money or get investment growth on it rather than starting from zero again.
    Originally posted by jimjames
    Thats very true, hadn't thought of that, thanks.

    perhaps you could pay the mortgage right down, but just leave it in place for the 4 years? i would probably leave the mortgage in place for now and just invest all you can: set up a Pension and a S&S ISA.
    Originally posted by planteria
    I'll definitely over pay it, i've already done the max for this year and will max it out next year for sure. Based on what yourself and JimJames have said, i'll wait until the 4 years have passed to pay it off fee free.

    Pensions, S&S and ISAís are on my list now, currently looking it, thank you. Ive seen the work SIPP mentioned on here too, so checking that out.

    What rate you paying? As you could be better off putting overpayment money into regular savers & fixed term bonds. Ive got 25% of the value of my mortgage (which is earmarked to overpay/pay off) in fixed rate account instead paying 0.4% more than mortgage.
    Originally posted by Zero Sum
    Oh maybe i wont overpay then, my rate is currently 1.99%. I'll look at savings accounts too. The one i have with Santander sucks anyway.

    A couple of you have mentioned that i should see an IFA, so ill book one next week. Might be able to give some guidance on the pension thing at least. But i wonít agree to anything straight away without doing a bit of research first. Im always a little bit sceptical with these kind of people that they donít have other interests associated to any advice they give you.
    • Peelerfart
    • By Peelerfart 14th Oct 18, 9:21 PM
    • 1,966 Posts
    • 1,705 Thanks
    Peelerfart
    Please post back OP, let us know what's said with your IFA.
    Space available for rent
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