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?

Denise

Denise,

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.

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