I just got a small inheritance. What to do? Invest, Refinance, Pay down mortgage?

The right answer depends on your interest rate, your financial situation, and your goals. There's no single best move. If your mortgage rate is high, say 6.5 percent or above, recasting is worth a serious look. You make a lump sum payment toward principal and ask your lender to recalculate your monthly payment based on the new lower balance. Your rate stays the same, your term stays the same, but your payment drops. The fee is usually $150 to $500 and it's done in a few weeks. This makes the most sense if you want immediate monthly relief without the cost and hassle of refinancing. If rates have dropped significantly below your current rate, refinancing might make more sense because you'd lower both your balance and your rate. But refinancing has closing costs of 1 to 3 percent of the loan amount, so the rate drop needs to be meaningful enough to justify the expense. If your rate is already low and your payments are comfortable, investing the money might produce a better long-term return than paying down a cheap mortgage. A 3.5 percent mortgage costs you less in interest than what a diversified investment portfolio has historically returned over time. Paying down the mortgage without recasting is also an option. Your monthly payment stays the same but you shorten the life of the loan and save interest over time. This is the best approach if you don't need a lower payment but want to build equity faster. The one thing you should do before anything else is make sure your emergency fund is solid. Three to six months of expenses in a liquid savings account. If that's not in place, fund it first and then decide what to do with the rest.

The best place to start would be to have a financial review and then determine where the best place is for the recently inherited funds.

The right answer depends on three numbers: your current mortgage rate, your investment alternatives, and your cash reserves. Most financial advisors would look at all three before recommending one path. In the current rate environment, if your mortgage rate is above 6.5 percent, paying down the principal has a guaranteed return equal to that rate, which is difficult to beat on a risk-adjusted basis in most investment accounts. If your rate is below 5 percent, the math often favors investing in a diversified account over the long term because historical market returns have exceeded that threshold across most 10 to 15 year periods, though past performance does not guarantee future results. Refinancing makes sense only if you can lower your rate meaningfully and you plan to stay in the home long enough to recover the closing costs, typically 2 to 4 years at minimum. In Hernando County and across Florida, a practical consideration is homestead equity protection. Florida homestead exemption protects unlimited home equity from most creditor claims for primary residents. If you have concerns about business liability, medical bills, or other judgments, building home equity in Florida carries a legal protection that a brokerage account does not. That context sometimes tilts the decision toward paying down the mortgage even when pure rate math might not. Whatever you decide, keep at least 3 to 6 months of living expenses in accessible cash first, before allocating anything to investment or paydown. Talking to a fee-only financial planner for one session is worth it before you allocate an inheritance, because the right answer is specific to your full financial picture. Kevin Neely & Kaitlynd Robbins | K2 Sells

First… I like that last option more than I should, but let’s make it work for you instead. Before doing anything, I’d ask yourself one thing… what would make you feel more at ease right now? If your mortgage payment feels heavy, paying it down or recasting can give you breathing room every month. That’s real peace of mind. If your rate is already low, I usually wouldn’t rush to refinance just for the sake of it. Investing can make sense, but only if you’re comfortable with some ups and downs and you don’t need the money anytime soon. What I’ve seen with clients is this… the “best” answer isn’t always the highest return. Sometimes it’s the one that makes your day to day feel easier. You can even split it. Put some toward the house, keep some liquid, invest a portion. There’s no one perfect move here. Just make sure whatever you do actually improves your situation, not just looks good on paper.

Before deciding anything, you need to look at: Your current interest rate on your mortgage Other debt (credit cards, car loans, etc.) Emergency savings (do you have 3–6 months set aside?) Your long-term goals (more property, investments, stability, etc.) From there, your options break down like this: Pay down mortgage: Safe, guaranteed return equal to your interest rate Recast mortgage: Lowers your monthly payment without refinancing (great if you want breathing room) Refinance: Only makes sense if rates are better than what you have now Invest: Potentially higher return, but comes with risk and longer timeline Hold cash: Not exciting, but smart if you don’t have reserves or are planning a move soon If you’re thinking about real estate—this could also be an opportunity to position yourself for another purchase, depending on your goals. Bottom line: don’t rush it. Park the money somewhere safe short-term, then sit down with a trusted financial advisor or lender and build a strategy around your actual numbers and goals. That’s how you make this money work for you instead of guessing.

First off—congrats. Second—don’t rush. The best move depends on your bigger financial picture, not just the money itself. If you’ve got high-interest debt, that’s usually the first thing to knock out. After that, it becomes a strategy conversation: investing can grow it long-term, paying down your mortgage gives you a guaranteed return (and peace of mind), and recasting can lower your monthly payment without changing your rate. Refinancing only makes sense if rates are significantly better than what you have now. And while burying it in the backyard feels safe… inflation will quietly eat it alive. This is one of those “pause, make a plan, then act” moments.

Grant, I would definitely pay off any non secured debt like credit card debt that has high interest as well as put some money in a savings account or CD in case of emergency. If you have money left over and your current mortgage is comfortable, you might consider an investment in a vacation property as a short term rental. Choose a place you enjoy visiting so you can stay when it isn't rented. If you like the Florida Panhandle (Panama City Beach, Mexico Beach, Port St. Joe or Destin) I would be happy to discuss the options.

Hi grant! Depends on your goals. What're you wanting to do? What do your long term goals look like? I always suggest purchasing another property to have your money work for you.