What to do with inheritance

My husband is due to inherit approximately $200,000. We have a $171,000 mortgage (30 years), and $50,000 in other debts. He doesn't want to pay off the mortgage, but pay $75,000 toward it, pay off the $50,000 and put the remaining money in a one-year CD. Then in two years he would like to rent out our existing house and apply for a new mortgage. Is this a smart move, or should we just pay off the balance of the mortgage?

I call CDs Certificates of Depression because they don't get a good return. You'll get a better return on your money if you use the inheritance to pay off debt. First, tackle the $50,000 in debt and then go after the mortgage. Once the mortgage is finally paid off you'll have control of your greatest wealth-building tool -- your income.

previous question | next question

Show Bankrate's community sharing policy
          Connect with us
Credit cards on a table

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.

Debt Adviser

Who pays deceased mom's debts?

Dear Debt Adviser, A couple of months ago, my friend's mother died. Her brother is handling the estate and has been wondering about their mother's $2,100 outstanding credit card debt. The mother had no assets except for... Read more

Partner Center

Connect with us