Our only debt is about $17k of my student loans, so even though it is probably not the smart choice given the interest rate, I'd pay them off just to be done with them for good and then I would invest the rest.
Pay off all our student loans at 6.8% (this is less than $100K, maybe $30K? I'm embarrassed to say that I don't know; the SLs are mostly H's and he handles all that stuff.)
Post by mrssavy42112 on Sept 18, 2012 13:35:59 GMT -5
Our only debt is my student loans ($<$20K) & about $5K left on my car. It would absolutely absolve all of our debt & would leave us with a sizeable down payment for a house.
Post by smilelari on Sept 18, 2012 13:37:07 GMT -5
We're currently doing Ramsey's snowball and we would continue with the snowball. It would be something like $50K to finish paying off our consumer debt (car, credit card, student loans) and then we would probably put $30K into an emergency fund. Then $20K into the start of our savings for the next house. It would definitely be good enough to put us in the position to buy a new house within the next 6 months.
I would pay off some debt (not all of my mortgage at 3.25%) and save/invest the rest. If I really came into that money, I would upgrade to a bigger house and book a fabulous family vacation for me, H, and our parents.
Including my car we are less than $10k in debt. I would pay off all our debt and then safe half of the rest and put the other half as a down payment on a house.
We're debt free now so I guess we would save/invest that money after taking a pretty kickass vacation
I will say though that one year my H got an unusually large bonus and, after much lobbying from me, we used it to pay off all our debt (mortgage, SLs, and a small car loan). I totally understand that this is not what most people recommend because of interest rates but I don't care. I feel more secure this way and have no regrets.
Post by phunluvin82 on Sept 18, 2012 13:40:07 GMT -5
Though it wouldn't be the MM thing to do, we'd pay off all our debt, even SL's. Keeping up with all the various SL payments and loan servicers has been a total PITA...and we've also dealt with lots of errors in our accounts and payments that have taken several months, and dozens of phone calls to straighten out. I would be okay paying those off even at a low rate just for my own emotional sanity!
We'd invest the rest. Maybe use some of it for a house down payment since we currently rent.
We've been in this scenario. We moved (to a more expensive house & kept other house to rent out), used about $30k for facilitating this & have invested the rest. We paid off nothing (we have my SL & of course mortgages). I have no regrets (we did this 2.5yrs ago).
With a lump sum of $100K I would not pay off any debt that was under 5%.
I would go on an awesome vacation, buy some treats, and save/invest the rest. We'd probably use some on a DP but would only put enough down to make sure the monthly payments were at a comfortable level- mortgage rates are just so low right now.
Post by dexteroni on Sept 18, 2012 13:42:24 GMT -5
We could pay off our mortgage (which is our only debt), but we wouldn't. We would probably add half of it to our next-house-DP fund, which would put us at our goal and allow us to start seriously looking. We would save the other half to use as needed while we try to sell our current house (paying two mortgages, maybe bringing money to the table, paying the seller's closing costs, etc). After it's sold, I would take whatever money is left and invest it.
100K wouldn't make me debt free, but for the sake of argument... I would pay off the car and the second mortgage (which totals about $30K together), use 10K for vacation, blow 10K on fun stuff, and invest the other 50K. I don't care about paying off the SLs or the 1st mortgage.
Combination: I'd pay off some debt but save/invest the rest.
This. I would refi just to get rid of the pmi. then save the rest and keep paying the same $$$ amount on my mortgage which would mean I would be over paying by $200 per month.
I think I'd split it half and half. Half to retirement, specifically. The other half to pay off student loans. I would still have some loans that wouldn't be covered, but I could at least get rid of the stupidly high interest rate ones.
I think I'd also take out $15k as a future wedding/car fund.
Post by HoneySpider on Sept 18, 2012 13:46:19 GMT -5
I'd sell my house and get the fuck out of here. I want out of south Texas so badly. Having the money would mean we could move without having jobs, which is the main reason we're not gone yet. I hate being an adult and having to be practical.
Post by thatgirl2478 on Sept 18, 2012 13:48:40 GMT -5
If it made me completely debt free I'd do that.
Then I could increase my DH's 401k contributions to the max, we already max out IRA's and the rest of what we do for retirement has to be standard investments b/c I don't have access to a retirement plan ( booo).
However, 100k would only finish off one of our debts. We'd need $230 to get us completely out.
Post by marchmom06 on Sept 18, 2012 13:49:38 GMT -5
I'd pay $90K towards our second mortgage. No student loans or other (non-mortgage) debt. I'd allocate $5K for something fun (a trip, maybe) & $5K for the kids college funds.
We have about 15k in non-mortgage debt, so we would definitely pay that off. Then we'd probably pay enough towards the mortgage that we could lose PMI. After that it'd go towards investments.
Actually, we'd probably put a good chunk towards home renovations. THEN we'd invest it.