Best way to finance...

jolester · 22 March 2018 at 11:12AM

Hi all,

Looking for some thoughts on what will be the most cost effective way to raise finance for home improvements (without waiting til we've saved up!) We'll probably need approx 20k to spend

Below is a snapshot of our current situation

Me
0% CC £2700 balance, paying £74 p/m
Loan £850 balance, paying £172 p/m 5 months remaining

Husband
0% CC £4000 balance, paying £60 p/m
Loan 1 £2800 balance, paying £161 p/m
Loan 2 £3750 balance, paying £197 p/m

We're not fussed about paying off CC's

We will have a little more disposable cash available than what we are currently paying out, but as we have only just been approved for our new mortgage we want to keep finances the same until we've completed (hopefully the next couple of weeks or so)

Would we be better off getting a larger loan and incorporating paying off our current loans, or continue with these and take out an additional 20k loan.

Thanks for any advice

[Deleted User] · 22 March 2018 at 11:22AM

What are your incomes?

You're already carrying a fair chunk of debt. That, plus a new mortgage, is likely to limit your options.

What rates are your current debts at?

jolester · 22 March 2018 at 11:30AM

I take home £3500 per month and have 10k (min) per year as additional dividends (director of ltd co)

Husband is on 40k per annum

I'm not sure on interest rates of current debts, I can ask my OH to find out his, I'm not overly fussed on mine with it disappearing so soon

spadoosh · 22 March 2018 at 11:38AM

I think more information is required to offer advice.

My concern is with getting the mortgage that most people tend to borrow as much as possible and are on the edges of affordability. If thats the case i cant see a loan being offered easily or cheaply.

You coudl try consolidating the loans and adding a home improvement aspect to it but youll be looking at a loan of about £27k , whilst not impossible youll be restricting your lenders.

Like i said more information is needed. You could earn £300k a year in which case i cant see there being any issues, if you earn £50k (joint) youll have more problems.

BUt then if you earned £300k a year you wouldnt be needing loans and credit cards.

Sorry too slow.

jolester · 22 March 2018 at 11:48AM

spadoosh wrote: »

I think more information is required to offer advice.

My concern is with getting the mortgage that most people tend to borrow as much as possible and are on the edges of affordability. If thats the case i cant see a loan being offered easily or cheaply.

You coudl try consolidating the loans and adding a home improvement aspect to it but youll be looking at a loan of about £27k , whilst not impossible youll be restricting your lenders.

Like i said more information is needed. You could earn £300k a year in which case i cant see there being any issues, if you earn £50k (joint) youll have more problems.

BUt then if you earned £300k a year you wouldnt be needing loans and credit cards.

Sorry too slow.

Our new mortgage is £600 per month more than our current mortgage and we will have approx £1500 per month left over (including budgeting right down to monthly haircuts/going out/Christmas etc)

The debt above is from the days of not earning so much and has caused us no pain paying it, so apart from changing credit cards to 0% we have allowed it to run it's course.

We got married late last year so a lot of our disposable income went towards paying for this, we have then been saving monthly to ensure we have all the funds necessary for stamp duty and all other associated costs with moving house so now this is covered we have the disposable cash again

spadoosh · 22 March 2018 at 11:58AM

If theres no ERC on the loans i would be paying them off first (5 months of £1500)

Then finding a loan with the lowest interest rate and no overpaying limits and chuck the £1500 per month at that. Then youd be looking at less than 2 years of loan. So all debt paid off in 2.5 years.

With that income i suspect you could get a good chunk of the needed money from a credit card. Thatd be the other option i looked at in order to minimise interest payments. You can get 0% on purchases over 24 months and that 24 months would equate to £36k of disposable income available to pay it all off.

Or you could wait and save for 18 months and not pay any interest at all.

jolester · 22 March 2018 at 12:15PM

I do have a lot of outstanding availability on credit cards so I suppose we could use that and pay off £1500 per month off those (if I were able to get 0% purchase rather than just the standard cards they are)

We can't really afford to wait 18 months as a lot of the funds are making sure the grounds of the new house are secure for our dogs and this would need to be done immediately

A23548 · 31 March 2018 at 8:49PM

With those kind of salaries surely snowballing the current debt to become debt free would be the best option. If your income is.around 6k a m9nth I can't understand why you would need loans? As surely cutting down/spending.less and budgeting better would see this.money inn the year.

System · 1 April 2018 at 2:08PM

jolester wrote: »

Our new mortgage is £600 per month more than our current mortgage and we will have approx £1500 per month left over (including budgeting right down to monthly haircuts/going out/Christmas etc)

Can you not put off what you want to do 12 months? If you have £1500 a month free you'll have almost all of it in a year's time. Fence off an area for the dogs for the time being.

BrassicWoman · 1 April 2018 at 2:35PM

I'm struggling with a £20k cost just to get the fencing done for the dogs - surely this is a lower cost item, and you could pay for just this now and the rest once you have saved?

Fireflyaway · 1 April 2018 at 3:44PM

Your income isn't bad but you are wasting £660 a month on debt repayments. Why all the loans? ( not being nosy, just mean you can't have managed your money well to have multiple loans and credit cards). I'd probably focus on paying off the debt and then save up for the home improvements. Is it really something that has to be done immediately? If you have £1500 a month spare it won't take long to pay the debts and save up for what you need.

Best way to finance...

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