# What to do with lump sum from sale of house?



## DjembaDjemba (12 Dec 2007)

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Looking for advice as to what to do with lump sum received for the sale of a house gone through earlier this year. Would it be a good investment to pay off the full mortgage on residence and invest some of the remainder, or would it be more advisable to keep some of the mortgage open but invest more into equities. Also recently opened a first Active regular savings account after reading the tips on this website, cheers lads. Also interested in taking out some AVC scheme, are these good value for money? Would be grateful for any advice. Tks!!                               Age: 36
Spouse’s/Partner's age: 33

Annual gross income from employment or profession: 70,000
Annual gross income spouse:65,000

Type of employment: Radiologist

Expenditure pattern: In general are you spending more than you earn or are you saving? Recently opened asvings account, to deposit €1,000 monthly

Rough estimate of value of home €420,000
Mortgage on home €260,000
Mortgage provider: Ulster
Type of mortgage: Tracker, 4.95%
Other borrowings – None
Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? €3,000

Savings and investments:€330,000 sale of property this year


Do you have a pension scheme? Yes, health service pension

Do you own any investment or other property? Foreign property, value €120,000. Mortgage €515, Monthly rental €426

Ages of children: No

Life insurance: Just mortgage protection


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## ClubMan (13 Dec 2007)

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DjembaDjemba said:


> Would it be a good investment to pay off the full mortgage on residence and invest some of the remainder, or would it be more advisable to keep some of the mortgage open but invest more into equities. Also recently opened a first Active regular savings account after reading the tips on this website, cheers lads.


What are your short, medium and long term goals and what finances do you need towards these?


> Also interested in taking out some AVC scheme, are these good value for money?


Depends on the specific product. Ideally you want to minimise charges (e.g. aiming for 0% on each contribution and c. 1% annual management fee) while ensuring that there is an appropriate range of funds to choose from, customer service levels meet your expectations etc. There are loads of existing threads about this sort of stuff that are worth reading.


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## dicey_reilly (13 Dec 2007)

As Clubman says - it depends on your short- medium and long term goals.

Definitely take €3,000 and clear the credit card debt (and try to clear monthly going forward).

I would definitely recommend reducing the mortgage debt, some increased AVC as long as still within the tax threshold and keeping a 'rainy day/emergency' fund (≈3 months outgoings) in an accessible  deposit account/prize bonds.

Anything left - I would invest depending on goals as above.

Have fun
Dicey


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## ClubMan (13 Dec 2007)

Sorry - I missed the _CC _debt. That should be prioritised for clearance before anything else unless it's 0% or something like that.


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## chlc (13 Dec 2007)

We had a similar situation earlier this year, wife started AVC on state pension with a view to retiring earlier, paid of remainder of mortgage with a view to buying down near retirement hence teax free lump sum(no capital gains), I increased my AVC's on contributory pension, have a small sum with first Active online account 5.22% , also long term investment with Eagle Star 5-10 years investment fund charges are low and did some travelling which is a good return for body and soul.


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## DjembaDjemba (17 Dec 2007)

Cheers lads, tks for the replies. Will have to assess short to long term goals. Was just interested to hear what the feedback would be on paying down the mortgage. As we are paying just under 5% interest on the €260k, and also seeing the lump sum being widdled away by 4-5% inflation i was wondering whether to clear the mortgage in one go would be sound finnancial advice. Or would it be more advisable to invest half of the lump sum in equities? Thanks again for the replies, chcl the travel option sounds very appealing as well. DD.


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## ClubMan (17 Dec 2007)

Er - what about clearing the _CC _debt first?!?


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