Paying Off Mortgage

[Connemmara]

I need to pay £10,000 to pay off my mortgage in August (we have talked about this before but this is a bit different)

Now I have the £10,000 to pay it off but it will leave me very little savings.

Went to financial advisor about 2 weeks ago who has told me that I can borrow whatever I want ie perhaps 20,000 or 30,000 pay the £10,000 off and keep paying the mortgage and leaving me £20,000 better off monetary wiser off) I have no children and to tell you the truth to have a bit of paper saying that I own my house does not bother me cos the paper will be threw into the drawer).

What happens when I croak it - then house is sold eg Santander or any mortgage provider - will get their £30,000 back and if my house is worth let's say £100,000 then £70,000 will go back to my relatives I just think although I have talked over with friends too - I just feel why shouldn't I have the money in my pocket while I am alive - after all I am not going to enjoy the £70,000. Any advice please or snares I would not be aware off. thanks for any advice

[factor-fiction]

Equity release can be a good idea in these circumstances. Things to be aware of though- the interest rate may be fairly high- say 7% pa, there may be a set-up fee of say £1000 plus legal costs, and the cash you get may mean your savings reach a point where you are no longer entitled to pension credit or housing benefit

[hc4361]

How old are you?

What would you do with a lump sum of £20k? You will pay more in mortgage repayments than you will make in interest.

Are you in receipt of any benefits? Owning your house outright won't affect your entitlement but having a lump sum of 20k or more will.

[Connemmara]

thanks fiction - I dont get pension credit or housing benefit or any benefits. The equity question came up with the Financial Advisor and she started talk about going on to Equity when I became 70 years old. I couldn't take much more jargon just stayed with what I mentioned above. I receive a private pension which pretty much stopped me getting anything from the government.

[hc4361]

If you can manage on your income don't get a loan just for the sake of having money in the bank.
You can take out a secured loan at any time if you need to and in the meantime you wouldn't be making any mortgage payments.

[society]

Me personally, I'd pay the mortgage off. I can't stand owing debts or have debts hanging over my head. You could then save 'that' mortgage payment.

[factor-fiction]

I think it can still be worth doing if it gives you cash to hand for emergencies and for holidays and little extras without having to worry about the next heating bill.
But remember if you borrow £30000 interest only the interest at 7% pa would be around £40 a week.
I will find you a good guide to equity release- I'll attach a link later this evening

[Connemmara]

I don't mean this in a harsh way but I do have plenty of nieces and nephews that one or two I bother with so I would not want all of very well earned money to go to them - I do know there are other things to do with the money but just feel it should be in my pocket rather than theirs - they don't do (nieces and nephews) any wonderful things for me - sorry for sounding mean. My will had been to brothers and one sister but like 2 brothers are dead and the other 2 are dead men walking - to leave a will to them would be stupid. They are too old - I made that will in 1994

[Connemmara]

society know what you mean that mortgage payment is only roughly about £190 per month. but dont you speculate what you accumulate.

[Maydup]

^^ Follow Factor's advice - best answer. And if you have no desire to bequeath your money, enjoy it while you can.

[Connemmara]

for hc where would I get a SECURED loan if I heeded your advice - do you know what I mean - if my own £10,000 is gone it would leave me about £5,000 - need a new kitchen, like to go on a holiday, get the house redecorated. £5,000 would not be enough to cover that.

[Connemmara]

factor fiction I wouldn't be paying £30,000 interest only ever again - it will be repayment.

[society]

Conne, I'm not trying to convince you, just saying what I think.

I'd pay off the mortgage with piece of mind knowing I don't 'rent' from the bank or anyone else. Then budget myself to save for going on vacations or treating myself to 'luxuries'.

This is what I did. Now everything I work for is all my own. Pay a few utility bills and that's it; all is mines. As I said, I hate debts.

[factor-fiction]

If it's to be a repayment mortgage over say 10 years it will cost you a lot, lot more then. I assumed it was equity release where you only pay interest and the equity re;ease company gets the £20000 or £30000 stake in the house which is repaid on your death or the sale of the house

[factor-fiction]

Hi society (I always like saying that)- but it seems a waste of resources when someone has limited cash available and has to scrimp when they have an expensive property that some undeserving beneficiary may eventually get. I think equity release makes sense, provided you get the right deal

[Connemmara]

she actually gave me a quote for (note is downstairs) for paying hold on I will get note This is the note ie to borrow the payment back

£10,000 x 5 years - payment will be £78 per month
£20,000 x 12 years payment will be £170 per month

sorry that is the info I can read as she did scribble all around the page

[Connemmara]

factor I am only 62 and she said I was too young re Equity Release - you need to be 70 - there was too much for me to take in.

[society]

FF, I understand your points. But, this is just me.

We all know we have to die someday but most of us live without a second thought of passing tomorrow or in the near future. As I said, I don't like debts hanging over my head.

[Connemmara]

society I know what you are saying but sure if I was to go tomorrow I haven't left debts - my house will be sold at quite a good price - £10,000 will be paid and the rest go to probably undeserving relatives. No I genuinely don't think I have debts over my head. All the money is in this house. I am a wealthy woman dead.

[tonyav]

Paid my mortgage off 5 years ago, best thing I ever did imo.

[society]

Like you Connie, I live alone and middle age. When I die nothing is going with me. Whatever happen to it, happen to it.