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Original poster

20k inheritance. WWYD?

39 replies

Potterurotter · 28/03/2018 15:42

Hi all, I’m 28 and recently came into 20k inheritance. I am torn what to do but know I don’t want to fritter it away.

I live with my partner. He owns the home we live in and he has 100k+ equity. We are looking to move to a bigger house in about a year or so.

I don’t know what to do with my money. I always wanted a property of my own to rent out and keep as long term investment. Was looking at student houses with buy to let mortgage I could buy around £80k mark so not sure if viable for good return as would likely be a two bed, three max otherwise would rent to a couple or so (non-students). My partner thinks it would be best if i just put the money into paying off his mortgage giving us more equity when we move.

Can you advise what is best? Open to other suggestions.

OP posts:
HollowTalk · 28/03/2018 15:47

I wouldn't do what he suggests. I would if you were married, but not if you're not.

I think it would be a good idea to get your own property to let out. There are lots of landladies on this site who can advise you.

Do you currently pay towards your partner's mortgage?

whatisanamebyanyother · 28/03/2018 15:49

Honestly I’d start a lifetime ISA

Original poster
Potterurotter · 28/03/2018 15:52

Hi HollowTalk, we are not married. I’m not sure how buying a property would affect my ability to get a second mortgage on the home we buy in future. I worry about what if I bought a house to rent and boiler went or something but am aware I would need a buffer to pay for things just in case and need to do my research on responsibilities of being a landlord. I have been paying all bills except the mortgage for 1.5years, but this month and next month I am paying everything as he has had to have a change of career and is studying for a self employed role

OP posts:
HongKongPhooeyNo1Superstar · 28/03/2018 15:54

Don't give him any money. You're not married and if you break up it will be hard to get it back.

Original poster
Potterurotter · 28/03/2018 15:57

I thought about lifetime isa but would like something with an immediate return at the moment aswell as long term gain

OP posts:
Helpmeplan · 28/03/2018 15:58

Do NOT pay 20k off his mortgage unless you put a charge on his property for that amount and it is unlikely his mortgage lender would allow that. He could turn round and tell you to get stuffed and you'd have no way of getting the money back.

For a BTL purchase you normally need a 25% deposit and a minimum of 25k annual salary plus own your own residence so you will not find it very easy to do that yet either.

If I were you I'd book an appointment with a good financial adviser and talk about possible investments.

OakIsBetterTho · 28/03/2018 15:59

You'd be utterly mad to give him your money to pay off his mortgage... I'm actually appalled he even suggested it!
Buy your own property, seriously!

Dvg · 28/03/2018 16:02

Id say buy a house, can always sell it later.
Either get a really nice 1 bed with parking and a garden or a nice 2 bed, depends on where you live as 1 bedrooms where i live are 100k minimum but you can get some pretty decent ones

SchadenfreudePersonified · 28/03/2018 16:04

Do NOT pay 20k off his mortgage unless you put a charge on his property for that amount and it is unlikely his mortgage lender would allow that. He could turn round and tell you to get stuffed and you'd have no way of getting the money back.

Helpme has spoken wisely.

You need to protect yourself. This forum is full of women who trusted me until they got sh*t on from a great height.

I hope your relationship lasts, but unless you have some sort of legal protection in the form of a marriage certificate or a financial charge, you would be foolish to put the money into HIS property (unless he makes it joint with you, of course . . . )

He may be the most honest guy in the world, and never dream of treating you badly - I hope he is - but if (God forbid) he gets hit by a bus or something similar, his assets would go to his parents/siblings before you. They may not be so keen to give you back any capital you have given to him.

Have a word with your bank manager. Financial advice is often free,

Rundemlegs · 28/03/2018 16:05

Having your own property will mean you have to factor it in to your next purchase, with regards to both affordability and also it'll make you liable for the 3% stamp duty (as you'll have a second home).

If it were me, I'd put the money in the highest interest savings account you can, then once you've bought your new home with partner and researched everything related to being a landlord, then I'd consider buying your second home (3% stamp duty won't be much on a 80k house vs a 300k house). Or you could us it to buy the new house.

cloudtree · 28/03/2018 16:07

DO NOT pay off a chunk of HIS mortgage

mocha70 · 28/03/2018 16:09

If you were going to get married I would say save it for now and put it towards the bigger house and buy that house in joint names.

It doesn't seem right that you are currently paying the whole mortgage on your partners house without owning a share of it yourself.

Plexie · 28/03/2018 17:10

First the practicalities:

  1. Do you have any savings already? Ideally you should have the equivalent of 6 months' outgoings. Bear in mind you have no legal entitlement to your partner's house so if you were to split up you'd have to find somewhere else to live fast (how much for deposit and rent?).
  1. Can you get a buy-to-let mortgage if you don't already own a property? You need to look into that.

Personally I'd look at parking the money in a savings account for a year or two to see what your medium term plans are (co-owning a house? Marriage?). Interest rates are low but are (very) gradually increasing. Aim for an account that pays at least 1%

Babymamamama · 28/03/2018 17:12

Get your own property.

emma16 · 28/03/2018 17:18

Never ever in a million years would i take over paying someone else's mortgage because they want to better their careers, at the cost of you.
If you split up in a few years, you'll be entitled to nothing possibly as its all in his name, and he walks away with his new career funded by you. As awful as it sounds, look after number 1.

PissedOffNeighbour · 28/03/2018 17:22

I wouldn’t go down the buy to let route as tax changes have made having a mortgage on a BTL much less attractive. I would buy premium bonds for now as interest rates are so low and then use it when you buy the joint property. Maybe consider getting married too.

Feelings · 28/03/2018 17:23

The cheek of him asking you to pay off his mortgage!!

JoJoSM2 · 28/03/2018 18:34

You don't mention other savings. What's your pension like?

You could consider a lifetime ISA as that will offer the government bonus. You can only put away 4K in a tax year but as the tax year ends next week, you could do 4+4 over the next 2 weeks. You'd get the government top up. You could use the money towards a house purchase in the future.

Topping up your pension could be an option too depending on current circumstances.

Other than that, it's things like stocks and shares ISAs but I'd only choose that for medium or long term investments. If you're going to buy in a year, I'd keep it in savings. As interest on savings is very low, you could as well at down DP's mortgage but as PP explained, you'd need to be married first (the legal fees involved in putting charge on property etc might not be worth it).

JoJoSM2 · 28/03/2018 18:38

And I'd advise against becoming a landlady unless you've got high income and other savings.

HollowTalk · 28/03/2018 18:42

Also, if you pay £20K off his mortgage, his repayments will be lower. He's the only one affected by that. Your bills will stay the same.

Just out of interest, how much do you pay on all the bills? Do you mean you pay for his food bills, too?

Can you tell us how much he pays per month and how much you do, and how that relates to earnings?

Original poster
Potterurotter · 28/03/2018 19:23

Thanks for all the comments.

I earn 30k, up until November last year he was on £45k. However he lost his job. Currently he takes what he can was doing amazon deliveries and building work decided he wanted to do a certain job but would have to retrain. As this was the only viable option (retraining) for long term prospects and decent salary as he has no other qualifications really I agreed to fund this as a loan, £1800. However he couldn’t retrain and work full time as he wasn’t doing the studying but was paying all the bills, after many arguments I agreed to pay bills as not a lot of viable alternatives. His new job should be £35k plus and should start earning in May.

My pension is local authority, savings only the 20k I mentioned which are basically none as was inherited.

Outgoings for him are £1700 inc mortgage (£675) all other bills and outgoings including money for his five year old to ex. I have been paying just over £400 which covers countil tax water gas/electric to him and I buy all the food, but in March I have paid the lot and I will need to in April also. I did this on the basis that I know he is sitting on equity, but think I realise I probably won’t ever get it back.

OP posts:
grannycab · 28/03/2018 19:29

premium bonds, you might win a million!

Original poster
Potterurotter · 28/03/2018 19:34

But then again I wouldn’t be able to get on the ladder when we move anywhere near where we live (Greater London) without his equity

OP posts:
MuttsNutts · 28/03/2018 19:35

My partner thinks it would be best if i just put the money into paying off his mortgage giving us more equity

I bet he does! DO NOT pay anything off HIS mortgage!

CountFosco · 28/03/2018 19:43

The lifetime ISA sounds good. Can you make AVCs on your pension? Or invest in a mixture of cash and S&S ISAs? Maybe speak to an IFA. You're right not to fritter it away but it's not a massive sum so invest it sensible. But NOT on your DPs mortgage unless he marries you and you get your name on the mortgage.