Reply With QuoteMortgage. Once that is gone your finances get a lot easier ;)
I have a question.
If you were about to come into a generous sum of money which of the following would you do:
1). Pay off a good chunk of the mortgage
2). Put the money aside for university fees, (three kids) and possible future weddings.
3). Invest in a rental property
4). Blow it on watches and fast cars
My head is leaning towards the Uni fees and possible wedding costs. I currently have no savings and a girly chunky mortgage. Thoughts?
Mortgage. Once that is gone your finances get a lot easier ;)
mortgage deffo
Good luck everybody. Have a good one.
Unless your mortgage rate is so low (or subject to big early redemption penalties)
that you can achieve more interest on a low risk investment its got to be mortgage
Number 3.
The property can be sold at a later date to pay for weddings, uni fees etc.
No brainer... Mortgage!
... however if you decide on the death by Latvian crack whores option? pics or it simply didn't happen
TT
Depending on the amount defo morgage if you can do both then morgage and uni fees and weddings the watches and fast cars you can do once your outgoings are lower with less morgage ?
1 and 3 if you can
My father saved all his life. When he reached eighty, he started suffering from dementia. He ended up in a home. Because he had savings and property, he had to pay for his own care. Inheritance? What inheritance!
Mortgage. It is liberating being free from debt. Once free, the other nice things come along naturally.
I'd do rental without a doubt.
Coke and hookers.
And possibly the mortgage.
Although no trees were harmed during the creation of this post, a large number of electrons were greatly inconvenienced.
Mortgage
Well... If some into a few quid and went with option 3... I think I've already made money on the investment property just through price rises... Option 1 is less hassle though!
When I came into a few quid, the first thing I did was pay off my mortgage.... It wasn't even that big, but the feeling that if anything were to happen to me, that my wife would be left secure with a roof over her head, was very reassuring..
Some more colour.
The amount I am not sure how much but could be 200k. My mortgage is double that and I own another house in Cyprus which is all paid. I say again, I have no savings and that scares me when those Uni fees are only six years away.
My mortgage is 2.75% fixed for five years one year in and yes the penalties look harsh for paying off a lump sum. They will allow 10% per year.
Maybe keeping the money in savings and paying 10% a year is the best of both worlds
B**llocks - watches and cars ;D
Sounds like the best plan, but part of the savings/ investments can be watches and cars if you buy wisely. But always sell at your leisure never under duress to get the most backOriginally Posted by langdalematt
Use most of it to pay off as much mortgage as poss.
But do save a little to have some fun. Short break, watch, etc etc.
IMO
5) keep the cash and invest all of it in stocks when the next huge fall comes
Any 'advice' given here is purely the posters own thoughts. Which I suppose is what the OP asked for. The advice may be good or not but can only be fairly generic.
The he only way to get good advice is to go to a trusted professional and give him all the info that he asks for.
They should then give you a range of options based on your current circumstances and your indicated future requirements.
The choice will still be yours and just because you have asked for professional advice you can still ignore it, take some or all.
Rental for sure unless my mortgage was huge? rental properties with the right deposit are self funding and then you own the lot at the end!! Also if you put the money in your house other than a remortgage you cant get to it whereas if anything changes in the future and need cash you can always sell the rental or remortgage that as long as the rent covers the mortgage on it which it will as they wont lend unless it does!!
For me its a no brainer as if I paid my mortgage of all I would have in 25 years time would be my house but if I have a rental on a 25 year mortgage running along side my mortgage in 25 years time I own 2 property's that has to be better than 1 😉
Plus as time has shown property in the long term is always the best investment, you will always manage to struggle through your mortgage payments and weddings/uni fees just as our parents before us did!! but the ability to buy a second property doesnt come around every day so I say grab it with both hands and reap the rewards in the future and have more of a legacy to leave your kids! I wish that was what my old man had done, two sisters who are divorced and Im not working in anything to do with my degree so im guessing hes wishing he would have invested his money elsewhere!!😀
Chris
"I spent 90% of my money on women, drink and fast cars. The rest I wasted,
Only joking, HFB has it right in my humble opinion.
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
Depends on how much it is and what the interest rate is on your mortgage. Priority number one should be to pay off debt, however you might get a better return investing it in a good mutual fund.
However the feeling of getting rid of a bunch of debt is a very satisfying one, so I won't discount that factor.
When the cash lands and the bank or BS and they ask you to come in for a chat if the Financial adviser is worth his salt then any outstanding mortgage should be addressed first or at least discussed.
Depends on your priority. Paying off the mortgage will be the safest option and it will make your outgoing less and generally make life easier.
Rental will give you income but you need to know your market and you will be taxed.
Watches you can enjoy and maybe sell on later if required.
It is just not saving at the present rates.
I would stick £100k on lowering the mortgage, buy a buy it let and a little bit in savings.
Last edited by eagletower; 24th July 2014 at 09:07.
Thanks, you have saved me the effort of typing.
Last edited by BrianT; 24th July 2014 at 08:26.
Mortgage I would pay a lump off rather than pay the interest.
Depending on where you are £200k could buy various rental property options, if you then use put the rental income in to a separate account and use it to make annual payments towards your mortgage, providing the property was bought at the right price you may even have change to buy a watch or two.
Mortgage first then blow the rest on coke.
Whoever does not know how to hit the nail on the head should be asked not to hit it at all.
Friedrich Nietzsche
3 definitely.
A good friend was in a very similar situation a few years ago and sought out a second property to rent. High value let to professionals and yet still had no end of problems with two tenants. One didn't pay for a good few months before he did a moonlight flit, the other left the place in a right state costing thousands to put right. Given the level of stress he felt it just wasn't worth the hassle despite employing management agents etc.
In the end he sold it and bought a second property in the Lakes. Rents this out pretty much all year round to the point it is booked up for the majority of 2015 and obviously has the use for himself and the family a few weekends/ weeks a year. His plan is to retire there in ten years when his mortgage here has been paid and will sell the house to possibly fund another given this one is working so well for him
Despite such a high turnover of guests he has yet to have any issues and in two years all he has done is give a few rooms a lick of paint. Guess not for everyone but the model is certainly working for him. He employs a retired couple to sort the handovers, check the property over and tend to the garden.
I don't have a view - it depends on your circumstances - but I am struck by how popular this option is in posts above, especially given that you're already quite exposed to the property market by the sounds of it. Mark Carney seems to be saying that the BoE is worried about household indebtedness, especially mortgage lending, because as and when IRs rise that would potentially kill the recovery as folks struggle to service debt. In other words he's trying to talk down this enthusiasm for property - although I'm not sure if people are listening, still less whether or not they should be.....
Cant provide you with any sound financial advice but I would suggest doing something sensible with the majority of it and something fun (car, watches, family holiday etc) with a small amount of it. Life is too short to be 100% sensible!
About three years ago i came in to some money and the first thing i did was clear the mortgage.Every morning i wake up i know it was the right thing to do.
Used the rest of it to travel and at one point i would have bought an expensive car but for some reason they no longer do it for me.(All those years of losing thousands of pounds)
I like this idea. Buying a rental in a place that you like to go to and can get some use out of tyoo. Covers a number of bases well.
I'd pay off a good chunk of the mortgage, and then you can slowly save for uni/weddings with the spare cash you'll have. I'm counting down the days till my mortgage is gone.
Speaking from my own experience, the first thing I did when receiving a large sum was to clear the mortgage. I was not happy to speculate by buying more property and getting into even more debt.
Times have changed and today it seems the norm to have a high mortgage, hence the reluctance to increase interest rates in case the whole pack of cards collapses.
The greatest deterrent to interest rate increase is the forthcoming election, and the potential loss of votes, so expect to see low interest rates until at least after the election, and plan accordingly
I prefer a mixed approach. Assuming your current mortgage allows you to overpay then overpay some, use some to speculate ie a rental as this should be generating cash you can then use to further reduce your mortgage, and lastly why not enjoy some watches and fast car(s)? You're only young once. Just buy right and minimise the depreciation as much as poss.
Oh and bugger the uni fees and wedding
Paying off the mortgage is boring and sensible.
You took the mortgage out knowing it was a long term debt.
Use the money enhancing your life. Uni fees is a good idea as well.
Having no mortgage is not that liberating
Are you kidding!.
And Mum N Dad live where after all the weddings and uni fees....the street!.
Now't wrong with SPEND ON ME ME ME,with any left over spend on YOU YOU YOU.
Absolutely not my experience, I'm happy to say. I was lucky enough to be mortgage free after a bit less than 10 years (saving and a bit of down-pricing in a very strong market) and that allowed me to follow the career path that I wanted, while still providing for my family. I've loved every second of it so far, and am pretty sure that it's the best financial decision that I've ever made.
And 'mortgage' does mean 'death pledge' - which I think is a bit of a clue....
But YMMV of course, OP - I certainly wouldn't want to offer any advice, because there are so many circumstances to consider. But being mortgage free suited my personality, my ambitions and my circumstances to a T.
Another vote for pay off all/part of mortgage. The OP mentioned he has no savings so if possible should aim to put 6 months living costs aside.
I'd pay mortgage, unless, there was a damn good property investement.
Didn't understand that post, have you been drinking lager in the morning again.
I realise this is very boring, but if it was me I would use the inheritance to fund higher pension contributions. For this tax year you can pay in up to £40,000 and get higher higher rate tax relief (i.e. if you pay tax at 40% that is an immediate 40% return). If you can do it through your employer then you will also save National Insurance (both employers and employees). Employees NI is 12% between the lower and upper earning limit, so that's is a c50% return immediately.
You could either pay off mortgage and use the reduced monthly mortgage payments to fund pension contributions, or put a lump sum into your pension. With the new pension rules coming in you're no longer required to use the pension pot to buy an annuity, and (at the moment) you can withdraw a 25% tax free lump sum from age 55.
I bought 2 Rolex and gave the rest to my ex wife in a divorce settlement, then sold them a year later to David Duggan when the bitch wanted more.
Ouch.
OP maybe move to offset mortgage so can keep 6 months living costs available, plus you never know when that grail watch may come up
Uni fees are on an interest free grant/ loan, a percentage to be paid back each month by the student linked to how much they earn.
There is a lower level of income before they have to start paying it back though, so if they don't earn very much they never pay a penny back.
I would buy a car/ holiday/ watch and use what's left to reduce the mortgage.
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