Would it be best to sell/rent or put this money to my home loan?

Q.

I am 40 years of age and recently widowed. I have a mortgage of $287,000. I earn $50,000 and have $70,000 left over from my late husband's estate. As I am left with a considerable mortgage to manage on my own, would it be best to sell/rent or put this money to my home loan? I would like to have some money put aside so am reluctant to put all towards my loan.

The interest alone on a mortgage of $287,000 will be over $25000 a year and I doubt you will be able to afford this on an income of just $50000 a year. Of course you are the one who will have to do a budget to see if this is correct. Don't forget to take into account costs of ownership which will be at least $2500 a year. If you rent the property out you will be able to claim all outgoings as a tax deduction but this will not be a huge benefit to you as you will be in the 30% tax bracket so will still have to find 70% of the expenses. In addition you will need to pay rent yourself if you let the house out. If you pay the $70000 off the loan, the interest payments will still be at least $19000 a year. If you feel you can afford this maybe it's possible to pay $60000 off the home loan and keep $10000 as a backup.