[money]

Hi All

long term member going anon due to the nature of the topic.

DH and I have recently been told we will be receiving a large portion of money from our grandparents will. Im estimating this to be between $50-$100k most likely about the $80k mark.

The only debt we have is our rather large mortgage of approx $430k.

Our house is brand new but has no landscaping. We have 1 child with another on the way very soon.

What would you do with the money? Do we lump it all on the mortgage to reduce our current debt? Do we use it to finish the house, spend a little on upgrading one of the cars and getting solar, put the rest on the mortgage to reduce our current living expenses?

What would you/should i do?

[countrymel]

I'd sit it in the mortgage offset account - then go from there.

You get the same benefit as if you HAD paid it off your mortgage but it is still there to spend if you want to.

[Justaduck]

I would be getting the solar, as it in a way is an investment in the long run & will mean you have an extra $400or so a quarter from not needing to pay electricity bills.
I would probably put some of it in an account for both of the kids & some of it aside for emergencies too.
If there was a need for a newer car (ie frequently breaking down, getting a bit small) I would look at replacing it.

Can you put it in an offset account that has free and unlimited redraws?

[CallMeProtart]

I'm someone who would always put it on the mortgage. I HATE paying interest. Have you done one of those interest calculators that shows you how much you would save over the life of the loan with $80k extra in there?
Especially with another child on the way, reducing your interest repayments should serve you well. I'd save improvements on the house etc till when you are not in such a financially precarious situation as being on one income with a large mortgage.

ETA. I'm assuming you have mortgage redraw or offset so that you could withdraw it later anyway

This post has been edited by CallMeAliG: 23/01/2013, 09:59 AM

[50ftqueenie]

Our mortgage is about $330k and we would also just put it in the offset account.

(we would probably blow some of it on a luxury weekend away for the two of us, and a cheaper beach holiday with the kids)

[BadCat]

Depends on whether you are getting by on the money you have. If you will be able to afford the landscaping and whatever else without that money then I'd just throw it straight at mortgage.

[suline]

I am with countrymel- straight into the mortgage offset, even if it is untouched for a couple of months, then you put a little towards say the landscaping - the reduction in your interest on your mortgage will be significant.

While it is sitting there reducing your mortgage you can make a good plan about where you want it to go.

[Julie3Girls]

Yep, straight into the offset account.
Then I would gradually do the things that we needed with the money, like the solar and the landscaping.

[*-*]

I'd sit it in the mortgage offset account - then go from there.

You get the same benefit as if you HAD paid it off your mortgage but it is still there to spend if you want to.

Where is the like button??

[HollyOllyOxenfre...]

If it were us in our current situation, I'd spend it on the landscaping, pay off the last of our personal loan and credit cards, and put any remaining on the mortgage. In our situation, paying off those last debts would free up a huge amount to pay extra on the mortgage, and while the idea of reducing the mortgage quickly is lovely, I currently have a crappy backyard and really want it sorted. We don't have an offest account so it wouldn't be an option for us, and we have a fixed rate for another 18 months so while we can pay extra on the mortgage we can't pay that much extra. I'd rather improve our standard of living now and set us up to smash the mortgage in a little while.

But obviously that is very specific to my situation