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Not such a redundant question.

I am being made redundant in 6 months. I own a home with a substantial mortgage. My wife works. My redundancy package is around $250,000. Can you give some advice as to what we should do with this package – pay towards the mortgage? Buy an investment property? Or?

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Posted by Mitchell A on 12/03/2014 @ 13:00

Thanks for the question Mitchell.

When you are made redundant it is best to remain as flexible as you can with your money. It becomes a different matter once you have found more work, but, until then, be cautious. You may need the money to finance every day expenses.

So this would mean you don’t pay it off your mortgage such that you can’t access it, or buy into an investment property which would tie it up and may even involve more debt.

I would strongly suggest that you set your mortgage up so that it has an offset account and park the money in there. This will generate savings in reduced interest whilst leaving the money fully accessible.

I know this must be a difficult time and I wish you well in finding that next career!

Posted by Martin Speedie on 13/03/2014 @ 11:41
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