To attempt to pay off a debt with a lump sum inflow – e.g. receipt of tax free cash from a money purchase, an inheritance, or proceeds from the sale of another asset:
1. First, go to the go to the Debt screen.
2. Select the debt on the ledger to the right side of the screen, provided that the debt has already been entered into the plan.
3. Expand Advanced Settings.
4. Click Payoff.
5. Select a Payoff Event, to schedule the future payoff of the mortgage.
Note: You can use the Time Panel, Event tab, New Event button to add an event to the timeline, if needed. This panel is on the right side of the screen next to the ledger.
6. An optional Preferred Payoff Source can be specified if the mortgage is to be paid off using funds drawn from a specific account. Specifying a Payoff Source is strictly optional, however. The software will otherwise draw funds from available cash, credits, and liquid assets, as needed, in order to make the payoff.
If the mortgage cannot be paid off using existing funds and assets, a red shortfall will appear in the cash flow and the mortgage payment will be stepped automatically down to the original amount required in the terms of the loan, as entered in the Payment Amount field of the Debt screen.
See also >> Use a lump sum inflow to pay down a debt
Is surplus income assumed spent or saved?
What happens to a lump sum inflow if it is not spent or reinvested? How can they be reallocated?
Other possible ways to use lump sum inflows proactively within a plan include:
- Transfer (deposit) a lump sum inflow into a savings account, investment or money purchase
- Use a lump sum inflow to purchase an onshore / offshore life fund or discounted gift trust
- Use a lump sum inflow to purchase a property or other asset
- Use a lump sum inflow to pay down a debt
Cash Flow Basics - An introduction to the basics of cash flow in Voyant