Inheritance/Mortgage
Discussion
Hi all,
Am a long time lurker and have been meaning to join and start posting for a while.
Hopefully will now continue to post and reply as have enjoyed reading through these forums.
So as many newbies I will start with I need some advice if possible please.....
I am 37 married with no kids at the moment and own a property with a current mortgage of £300k @ 2% roughly £1000 Pm
We are about to be given through wife's parents roughly £400k which is nice!
They have inherited a lump sum due to a friend passing away and kindly have said we can have that amount.
We are currently looking to move and our new home will cost us an extra 100k so in order to be mortgage free we would have to use the whole amount to pay off all debt and live mortgage free.
Which we are both more than happy with, But as we both earn a moderate salary we will never see that money grow unless the property increases by a substantial amount. And if we didn't move then this would not really matter anyway.
So the plan is atm to pay off said mortgage and moving expenses/fees and save what we would normally spend on the mortgage per month as a sort of 3rd income.
The question is, Is this something that you guys would advise or would you use that capital another way in order to make as much money as possible.
I know it's personal preference and with no real idea on how to maximize the potential I am unsure what our best options are.
Any ideas and or suggestions would be appreciated.
Thanks in advance.
Am a long time lurker and have been meaning to join and start posting for a while.
Hopefully will now continue to post and reply as have enjoyed reading through these forums.
So as many newbies I will start with I need some advice if possible please.....
I am 37 married with no kids at the moment and own a property with a current mortgage of £300k @ 2% roughly £1000 Pm
We are about to be given through wife's parents roughly £400k which is nice!
They have inherited a lump sum due to a friend passing away and kindly have said we can have that amount.
We are currently looking to move and our new home will cost us an extra 100k so in order to be mortgage free we would have to use the whole amount to pay off all debt and live mortgage free.
Which we are both more than happy with, But as we both earn a moderate salary we will never see that money grow unless the property increases by a substantial amount. And if we didn't move then this would not really matter anyway.
So the plan is atm to pay off said mortgage and moving expenses/fees and save what we would normally spend on the mortgage per month as a sort of 3rd income.
The question is, Is this something that you guys would advise or would you use that capital another way in order to make as much money as possible.
I know it's personal preference and with no real idea on how to maximize the potential I am unsure what our best options are.
Any ideas and or suggestions would be appreciated.
Thanks in advance.
I think it is down to attitude towards money and debt and your preferences re upside and downside.
I prefer owing nothing and paying in readies for what I want/need. I know that I'm lucky that I can.
It does mean that it will be harder for me to get into financial difficulties deeply or quickly than someone who is "leveraged", but it also means that I will not have opportunities to make serious money through borrowing other peoples'. I'm happy with that balance.
But only you and your OH can decide where that balance sits.
Peter
I prefer owing nothing and paying in readies for what I want/need. I know that I'm lucky that I can.
It does mean that it will be harder for me to get into financial difficulties deeply or quickly than someone who is "leveraged", but it also means that I will not have opportunities to make serious money through borrowing other peoples'. I'm happy with that balance.
But only you and your OH can decide where that balance sits.
Peter
Hermin23 said:
Hi all,
Am a long time lurker and have been meaning to join and start posting for a while.
Hopefully will now continue to post and reply as have enjoyed reading through these forums.
So as many newbies I will start with I need some advice if possible please.....
I am 37 married with no kids at the moment and own a property with a current mortgage of £300k @ 2% roughly £1000 Pm
We are about to be given through wife's parents roughly £400k which is nice!
They have inherited a lump sum due to a friend passing away and kindly have said we can have that amount.
We are currently looking to move and our new home will cost us an extra 100k so in order to be mortgage free we would have to use the whole amount to pay off all debt and live mortgage free.
Which we are both more than happy with, But as we both earn a moderate salary we will never see that money grow unless the property increases by a substantial amount. And if we didn't move then this would not really matter anyway.
So the plan is atm to pay off said mortgage and moving expenses/fees and save what we would normally spend on the mortgage per month as a sort of 3rd income.
The question is, Is this something that you guys would advise or would you use that capital another way in order to make as much money as possible.
I know it's personal preference and with no real idea on how to maximize the potential I am unsure what our best options are.
Any ideas and or suggestions would be appreciated.
Thanks in advance.
The answer as always is...............it depends.Am a long time lurker and have been meaning to join and start posting for a while.
Hopefully will now continue to post and reply as have enjoyed reading through these forums.
So as many newbies I will start with I need some advice if possible please.....
I am 37 married with no kids at the moment and own a property with a current mortgage of £300k @ 2% roughly £1000 Pm
We are about to be given through wife's parents roughly £400k which is nice!
They have inherited a lump sum due to a friend passing away and kindly have said we can have that amount.
We are currently looking to move and our new home will cost us an extra 100k so in order to be mortgage free we would have to use the whole amount to pay off all debt and live mortgage free.
Which we are both more than happy with, But as we both earn a moderate salary we will never see that money grow unless the property increases by a substantial amount. And if we didn't move then this would not really matter anyway.
So the plan is atm to pay off said mortgage and moving expenses/fees and save what we would normally spend on the mortgage per month as a sort of 3rd income.
The question is, Is this something that you guys would advise or would you use that capital another way in order to make as much money as possible.
I know it's personal preference and with no real idea on how to maximize the potential I am unsure what our best options are.
Any ideas and or suggestions would be appreciated.
Thanks in advance.
Firstly you will get all sorts of advice on here, some sound, some positively certifiable. You will need to discern which is which, but if anyone tells you to invest in a cash based product, then you can safely ignore them.
If I understand it, you are tossing up between having no mortgage, and having a 100K mortgage?
If you are cautious with your investments (ie you would lose sleep if you had an investment which decreased in value, even for a short period), then have no mortgage. Save your £1000 per month into pensions and or ISAs.
If you are more speculative, then invest the lump sum in a portfolio of equity linked funds, again using pension and ISA wrappers as appropriate.
Due to the size of the lump sum, and the fact that you sound like a relatively inexperienced investor, the best advice i can give you is....
Get some professional advice. What's best for you is going to be complex, and based on the very limited knowledge of your circumstances. anyone who gives you detailed, definitive advice is a fool.
Hermin,
I'm sorry for being so negative, but you can't ever be given credible advice here, not because the members doing the advising might not know what they're talking about, but because there are so many variables to be determined. A lot will depend on your circumstances, ideas for a family, future income and/or capital needs, tax levels, career prospects, retirement visions etc. Sorry to be so unhelpful.
As an aside, I'm assuming that your wife's parents are passing the money on as a deed of variation? If otherwise, is there a potential Inheritance Tax liability remaining for them?
I'm sorry for being so negative, but you can't ever be given credible advice here, not because the members doing the advising might not know what they're talking about, but because there are so many variables to be determined. A lot will depend on your circumstances, ideas for a family, future income and/or capital needs, tax levels, career prospects, retirement visions etc. Sorry to be so unhelpful.
As an aside, I'm assuming that your wife's parents are passing the money on as a deed of variation? If otherwise, is there a potential Inheritance Tax liability remaining for them?
Thanks for the advice and comments so far Peter/Hyena...
I was more thinking of using the 100k to move and having the 300k to invest,
But like you said hyena I/We are inexperienced in investing but would love to see the money grow!
Will be getting some professional advice that's for sure, Just wanted initial thoughts.
I was more thinking of using the 100k to move and having the 300k to invest,
But like you said hyena I/We are inexperienced in investing but would love to see the money grow!
Will be getting some professional advice that's for sure, Just wanted initial thoughts.
I'd do exactly that live mortgage free and invest your salaries. What if you invested the £300k and lost a big chunk of it? That opportunity to be mortgage free has gone because some fund manager had a bad day. Plus the f you had that £300k mortgage at 2% your investment has to make 2% just to break even if mortgage rates increase your investments have to do even better etc...
Hermin23 said:
Ginge Yes deed of variation!
I fully agree and get what you are saying, So many variables and to be perfectly honest I don't know at the moment.
It has sort of happened quite quickly so we are just getting our heads around it.
When navigating and lost, do nothing. Find high ground, look around and dump your brain for a bit. Glad you're receptive to the idea of forced rest - the phase of the planning process you're in at the moment is the most important one. If it takes you months, or a year, to arrive at tentative conclusions, good.. so what? It's not a race. I fully agree and get what you are saying, So many variables and to be perfectly honest I don't know at the moment.
It has sort of happened quite quickly so we are just getting our heads around it.
Its a difficult one.
Whilst the money is a "gift" what do her parents expect you to do with it?
Often with these kind of sums there is an inference as to what the money is to be used for and the person giving it will usually expect it to be used for that...
If they gave it to you to help with a new house then that's what its for. If they just said here is £300k and do with it as you like then I would seek professional advice as I suspect the answer may be more complex than you realise!
Whilst the money is a "gift" what do her parents expect you to do with it?
Often with these kind of sums there is an inference as to what the money is to be used for and the person giving it will usually expect it to be used for that...
If they gave it to you to help with a new house then that's what its for. If they just said here is £300k and do with it as you like then I would seek professional advice as I suspect the answer may be more complex than you realise!
BoRED S2upid said:
I'd do exactly that live mortgage free and invest your salaries. What if you invested the £300k and lost a big chunk of it? That opportunity to be mortgage free has gone because some fund manager had a bad day. Plus the f you had that £300k mortgage at 2% your investment has to make 2% just to break even if mortgage rates increase your investments have to do even better etc...
What if they invested the 300K and achieved 100% growth on it over 10 years ? Have you any clue how likely is it that they would achieve >2% ?!OP - As before, best not to listen to much on here, get some face to face advice.
Hyena said:
BoRED S2upid said:
I'd do exactly that live mortgage free and invest your salaries. What if you invested the £300k and lost a big chunk of it? That opportunity to be mortgage free has gone because some fund manager had a bad day. Plus the f you had that £300k mortgage at 2% your investment has to make 2% just to break even if mortgage rates increase your investments have to do even better etc...
What if they invested the 300K and achieved 100% growth on it over 10 years ? Have you any clue how likely is it that they would achieve >2% ?!OP - As before, best not to listen to much on here, get some face to face advice.
I'd pay the mortgage off. You're guaranteed then to be better off by the sum of the interest that said mortgage would have cost over the length of it. I'm like the other poster though, I don't spend what I don't have. It might not mean that I get the shiniest newest thing bit it does mean that I sleep soundly at night and NEVER worry about money
Hermin23 said:
Ginge Yes deed of variation!
I fully agree and get what you are saying, So many variables and to be perfectly honest I don't know at the moment.
It has sort of happened quite quickly so we are just getting our heads around it.
Yeah, but watch out. He's seen you've got some cash and is sucking you in....I fully agree and get what you are saying, So many variables and to be perfectly honest I don't know at the moment.
It has sort of happened quite quickly so we are just getting our heads around it.
No right or wrongs it's what you feel regarding risk... I would sell your house and move to a bigger/better house with the same 300 mortgage you have now that you can afford. That said house would work for you and grow possible in a better and more secure way than anything else. In 10-15 years time if you want to cash in just downsize. You will probably find that net you will be better off.
But to be safe and worry free pay off your mortgage and live mortgage free. That is the least risk you can take. Horses for courses. I would go property. BTL need to be careful is not as enticing and worry free as some may say and the return may not be the best. Unless you can buy BTL with a good potential for meaningful capital growth.
Seek independent professional advice.
But to be safe and worry free pay off your mortgage and live mortgage free. That is the least risk you can take. Horses for courses. I would go property. BTL need to be careful is not as enticing and worry free as some may say and the return may not be the best. Unless you can buy BTL with a good potential for meaningful capital growth.
Seek independent professional advice.
Gassing Station | Finance | Top of Page | What's New | My Stuff