I have a mortgage with the Bank of Scotland for £45,600 with 10 years left and a loan with Ge Money for £84,000 with 22 years left. . I have inherited enough to either pay off the mortgage outright or pay £40,000 off the secured loan. Ge said my payments could not be changed but the term would be reduced to leave 8 years left ,payments are currently £727.29 on that. I would like to reduce my monthly outgoings ,paying off the mortgaqe would do so by £389 pounds a month but the former none at all. I am not happy with the endowment policy with Winterthur Life as it it currently predicted to underperform by 47% and would leave me with a shortfall of £28,000 to find at the end of term.

First question :- Whats my best option?

Second :- Why would BOS need GE as Second interest on the property to allow a Deed of postponement ,I have read some of the previous questions/advice regarding this and they are concerned with increasing mortgages not paying them off completely ?

Thanks in advance

Peter.

P.s Property worth approx £160,000.

Hi...first of all this will depend on how long you are tied into the BoS rate? If you are not tied in I would borrow the extra off them to pay off the secured loan completely. The rate overall will be better, the term can be adjusted to suit your affordability and you will only have the one charge on your property and no need for a deed of postponement. Finally if there is a shortfall, split the payments so that the shortfall amount is put on a repayment basis, so that the mortgage will be paid off at the correct time without too much pain monthly.

Does this help at all???

Thanks Ian

What would be the best way to use the £40,000.00 inheritance ?