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Some advice on what to do with Large Sum of $.....

Well here it goes,
My husband and i are soon to recieve a large sum of money.
$60k.
Such a blessing after all i have been through. (car accident.)
We would like to own a home of our own instead of renting and paying someone else's mortgage off, but we are having trouble figuring which debt to clear.
We have a car that is currently leased, that we just started last year and has 4yrs left on the contract, to pay it out it would be roughly around $35,000 at the moment. This payout figure reduces every year by about $7,000.
We also have a personal loan which currently sits at $18,000.
We are havign trouble deciding wether we should pay off the 18k loan, or pay out the car lease, as the banks when applying for a home loan said we need to clear one off. The repayments for the lease is $800 a month and the personal loan is $240 a month. It would make sense to pay off the larger amount that is coming out of our income, (the lease) but as i said above, the payout figure reduces every year.

Do you think we should wait 4yrs until the car lease has finished and just keep paying it off over the 4yrs, and keep the rest of our money in an interest account, pay the personal loan out, then buy a home? Or pay off the personal loan apply for a house now and still pay the lease. So confused.

We would like to own a home of our own sooner rather than later, hubby thinks we should wait the 4yrs but i dont want to pay someone elses mortgage off when we could be paying our own...tricky one here! But any advice would be appreciated, lol :)

Oh and we live in Australia! ;)

Answer Question
 
Anonymous

Asked by Anonymous at 11:26 AM on May. 15, 2011 in Money & Work

Answers (11)
  • Talk to a financial planner. Tell that person your wishes, and they can guide you to make the right decisions.
    CookieMom108

    Answer by CookieMom108 at 11:31 AM on May. 15, 2011

  • I am looking into that, just would like some people's opinions on here :)
    Anonymous

    Comment by Anonymous (original poster) at 11:33 AM on May. 15, 2011

  • My first question is can you trade the car in for a more reasonable payment? That is very high on a lease.

    You said you pay $240 a month on the personal loan- I assume that is the minimum payment and you are paying a significant amount of interest and will be paying on the loan for a while.

    If it were me- and not knowing your full history- I would trade the car in for a more reasonable payment and buy the car instead of lease it and then pay off the personal loan. I would also pay off any other debt I had (credit card or otherwise). Then I would put 10k into some sort of investment (CD, IRA etc) so you have a nest egg to build on. At this point you would be left with around 30k which is more then enough for a downpayment on a house.

    Good luck!!
    maybaby22

    Answer by maybaby22 at 11:35 AM on May. 15, 2011

  • I wanted to add that now is a GREAT time to buy with low interest rates and lower home prices so if you wait a few years who knows where we'll be.
    maybaby22

    Answer by maybaby22 at 11:37 AM on May. 15, 2011

  • IMO I would pay off the loans. You can always save, but you won't always have access to that kind of money. It's much easier to save when you're debt free.
    MrsLeftlane

    Answer by MrsLeftlane at 11:37 AM on May. 15, 2011

  • Id pay off the car.
    gemgem

    Answer by gemgem at 11:38 AM on May. 15, 2011

  • $800 monthly for the car x 12 months in a year = $9600 annually. It seems silly to pay $9600 out of pocket in order to gain a $7000 dollar decrease in the payback amount.
    annabellelee

    Answer by annabellelee at 11:42 AM on May. 15, 2011

  • I agree with Maybaby22. $800 a month seems like an awful big payment to be leasing a car. I'd see if you couldn't trade the car in for something more reasonable too. Then pay off the loan, any credit debt, etc. Set some back, and put a down payment on a house.
    Eviesmommy

    Answer by Eviesmommy at 11:53 AM on May. 15, 2011

  • I'd get rid of the leased car. And get rid of debt.
    meooma

    Answer by meooma at 12:35 PM on May. 15, 2011

  • Pay out the car lease and keep the car for 100K miles or more. And it is always better to buy a car rather than lease (for the future) unless it is a deductible business expense. If you go to a financial advisor do not let them talk you into an annuity. Be careful!
    whitepeppers

    Answer by whitepeppers at 1:31 PM on May. 15, 2011

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