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  • FIRST POST
    • Stellaah
    • By Stellaah 17th Mar 17, 9:22 AM
    • 12Posts
    • 2Thanks
    Stellaah
    How can I raise £20,000?
    • #1
    • 17th Mar 17, 9:22 AM
    How can I raise £20,000? 17th Mar 17 at 9:22 AM
    Hello everybody,

    I'm hoping someone might be able to help.

    I recently moved to rural Cornwall and bought a property that needs a lot of work. I would like to raise £20,000-£30,000 to enable me to do the work. I don't have a mortgage and the property value is approx. £450,000. In moving I have also started working on a self-employed basis so don't have three years of accounts to show to a lender. (Nor a strong enough income in these early stages but an income that is steadily improving.)

    How can I raise the money with the collateral I have? As I have no children would embarking on an equity release agreement be a sensible option? I am not planning on moving again and am 56 years old. Unfortunately I don't have a pension I can tap into. My partner has a good pension of £80,000 but is only 52 so can't access it.

    Very much appreciate any help/guidance anyone can give.

    Thanks very much for reading this.
Page 1
    • Clive Woody
    • By Clive Woody 17th Mar 17, 10:01 AM
    • 4,299 Posts
    • 4,933 Thanks
    Clive Woody
    • #2
    • 17th Mar 17, 10:01 AM
    • #2
    • 17th Mar 17, 10:01 AM
    Rather than trying to borrow the whole amount up front could you do one job at a time and prioritise what really needs to be done then leave the nice to have jobs for a little later?

    I'm not sure if you would be able to arrange a mortgage for home improvements with limited evidence of income, but an experienced mortgage broker may be able to help...or someone on here may be along soon with a better idea.
    Rugby Union - The Greatest Game
    • PeacefulWaters
    • By PeacefulWaters 17th Mar 17, 11:04 AM
    • 6,047 Posts
    • 7,331 Thanks
    PeacefulWaters
    • #3
    • 17th Mar 17, 11:04 AM
    • #3
    • 17th Mar 17, 11:04 AM
    £80,000 to provide an income for life is NOT a good pension.
    • ReadingTim
    • By ReadingTim 17th Mar 17, 11:12 AM
    • 1,396 Posts
    • 1,957 Thanks
    ReadingTim
    • #4
    • 17th Mar 17, 11:12 AM
    • #4
    • 17th Mar 17, 11:12 AM
    My partner has a good pension of £80,000 but is only 52 so can't access it.
    Originally posted by Stellaah
    A bit off topic, but is that a pension income of £80k per year, or a total pension pot of £80k? If the latter, with UK life expectancy suggesting you'll make it to your early 80s, that £80k's got to last a good 15 years from what used to be statutory retirement age of 65....
    • Stellaah
    • By Stellaah 17th Mar 17, 11:43 AM
    • 12 Posts
    • 2 Thanks
    Stellaah
    • #5
    • 17th Mar 17, 11:43 AM
    • #5
    • 17th Mar 17, 11:43 AM
    Thanks Clive,

    The house doesn't have central heating and there are other issues that make sense to do all in one go - hence the figure.

    Thanks for your input though.

    And thanks Peaceful Waters and Reading Tim, too.

    Yes, a mistake to call it 'good,' but neither of us will be retiring. Our businesses are aimed at providing the pension shortfall. Thanks for posting.
    • DCFC79
    • By DCFC79 17th Mar 17, 11:57 AM
    • 28,980 Posts
    • 18,298 Thanks
    DCFC79
    • #6
    • 17th Mar 17, 11:57 AM
    • #6
    • 17th Mar 17, 11:57 AM
    The suggestion posted by Clive is a good one, why buy a property if you then struggle to get the money to do the work.

    Both get a 0% credit card and buy what you need, rinse and repeat.
    Last edited by DCFC79; 17-03-2017 at 12:19 PM.
    Je Suis Charlie
    • Stellaah
    • By Stellaah 17th Mar 17, 12:18 PM
    • 12 Posts
    • 2 Thanks
    Stellaah
    • #7
    • 17th Mar 17, 12:18 PM
    • #7
    • 17th Mar 17, 12:18 PM
    Thanks DCFC79,

    The land that comes with the property is what prompted the purchase - that and us being able to buy it and be mortgage free in a stunning part of the country. Yes, we knew we were stretched financially in terms of liquidity but it was too good an opportunity to turn down. If worse comes to worse we'll be able to sell it and walk away a six figure sum richer than what we paid for it. It just occurred to me that with an asset of value there may be a way to do the works sooner rather than later.

    Wouldn't I need a strong employment history to apply for a 0% credit card?
    • DCFC79
    • By DCFC79 17th Mar 17, 12:22 PM
    • 28,980 Posts
    • 18,298 Thanks
    DCFC79
    • #8
    • 17th Mar 17, 12:22 PM
    • #8
    • 17th Mar 17, 12:22 PM
    Wouldn't I need a strong employment history to apply for a 0% credit card?
    Originally posted by Stellaah
    Maybe, got any negatives on your credit history as lenders see that.

    If you can't get 1 then your partner gets 1 and you do the work in stages.
    Je Suis Charlie
    • Stellaah
    • By Stellaah 17th Mar 17, 12:31 PM
    • 12 Posts
    • 2 Thanks
    Stellaah
    • #9
    • 17th Mar 17, 12:31 PM
    • #9
    • 17th Mar 17, 12:31 PM
    No, my credit history is sound. Okay, that's interesting. Thanks very much for that.
    • foxy-stoat
    • By foxy-stoat 17th Mar 17, 2:46 PM
    • 1,563 Posts
    • 856 Thanks
    foxy-stoat
    How much disposable income do you have in the bank each month?
    • leslieknope
    • By leslieknope 17th Mar 17, 4:15 PM
    • 134 Posts
    • 187 Thanks
    leslieknope
    if you don't have children and nobody to leave it to, equity release on the house isn't a bad idea. just make sure you and your partner are both on the policy so it will only be charged back when both of you pass.
    CCCC #33: £42/£240
    DFW: £4355/£4405
    • Fireflyaway
    • By Fireflyaway 17th Mar 17, 4:20 PM
    • 830 Posts
    • 830 Thanks
    Fireflyaway
    So if my understanding is right you don't have a mortgage? If I was in your situation I would write a list of jobs and prioritise them. Then do a budget to see what you can save each month. Then just do each job in turn once you have saved up enough. I'm guessing the house has running water and toilet facilities? Anything else can be worked around till you can afford it.
    • Stellaah
    • By Stellaah 17th Mar 17, 4:26 PM
    • 12 Posts
    • 2 Thanks
    Stellaah
    Hi Foxy-stoat,

    Recently very little as we've been putting it back into the house, and in the early stages of our businesses income is varying considerably. For the purposes of repaying a loan we should have available £500 per month, sometimes more. Thanks.
    • Stellaah
    • By Stellaah 17th Mar 17, 4:36 PM
    • 12 Posts
    • 2 Thanks
    Stellaah
    Hi Leslieknope,

    Do you happen to know of any recommended equity release agents? From what I've looked at so far there seems to be quite the gamut and in these circumstances would definitely prefer to contact someone that there has been firsthand experience with. Thanks very much for posting.
    • Stellaah
    • By Stellaah 17th Mar 17, 4:45 PM
    • 12 Posts
    • 2 Thanks
    Stellaah
    Hi Fireflyaway,

    The property doesn't have central heating and most utilities are off grid. For the property the most appropriate central heating will be underfloor heating powered by a ground source pump. It's a job that needs to be done in one hit and requires a contingency fund to remedy any unforeseen problems that emerge. I'm no sissy but having gone through one winter without heating I am definitely motivated to have the work done before next winter. I just am unlikely to have raised the necessary sum by then. And given the value of the property and absence of a mortgage it occurred to me it might be feasible.
    • Shakin Steve
    • By Shakin Steve 17th Mar 17, 5:37 PM
    • 699 Posts
    • 492 Thanks
    Shakin Steve
    Hi Stellaah. First of all, well done for grabbing hold of life with both hands. Prudence would be the order of the day on here, but following your dreams is what life is all about.
    I'm no expert on equity release, but looking at your age(s), I'm not sure what would be available. You have no intention of selling, so it follows that the loan would probably not be paid back for 35-40 years. I don't know what interest these companies charge, but £30000 could turn into a very large sum in that amount of time. If property prices grew at a faster rate, in your area, over that period, you would be fine. But if they lagged well behind, they could end up owning most of the value of your house. On the other hand, an equity loan as a percentage of the value of your house would only stay at that percentage. I really don't know how it works.
    That is why you really need to see an advisor in my opinion, it is a big decision. Good luck.
    I came into this world with nothing and I've got most of it left.
    • Annie1960
    • By Annie1960 17th Mar 17, 6:24 PM
    • 2,364 Posts
    • 1,375 Thanks
    Annie1960
    Sounds like you have an exciting project ahead of you.

    I bought a place that needed a total refurb and I have already spent well over £20k with a lot more to go. Multiply that £20k by 4 to get a realistic figure (unless you can do most of the work yourself).
    • Stellaah
    • By Stellaah 17th Mar 17, 6:26 PM
    • 12 Posts
    • 2 Thanks
    Stellaah
    Hi Shakin Steve,

    Thanks very much for your post. Prudence is always good and it's definitely sensible not to overstretch yourselves financially over something as important as a house but I did the same 30 years ago and never regretted it.

    Yes, it is the length of the term that causes me the most concern. The percentage value method would definitely be more sensible of the two. Though a standard loan would be even better. But even then, given how much value we've already put on the property with the work already done even a percentage basis will see the lender handsomely compensated for the equity release loan. But you can't have your cake and eat it, of course. If you want the money you're gonna have to pay the price. Maybe it will be another cold winter after all.

    Thanks very much for your input. Really appreciate it.
    • GDB2222
    • By GDB2222 17th Mar 17, 6:33 PM
    • 13,672 Posts
    • 72,595 Thanks
    GDB2222
    Hi Shakin Steve,

    Thanks very much for your post. Prudence is always good and it's definitely sensible not to overstretch yourselves financially over something as important as a house but I did the same 30 years ago and never regretted it.

    Yes, it is the length of the term that causes me the most concern. The percentage value method would definitely be more sensible of the two. Though a standard loan would be even better. But even then, given how much value we've already put on the property with the work already done even a percentage basis will see the lender handsomely compensated for the equity release loan. But you can't have your cake and eat it, of course. If you want the money you're gonna have to pay the price. Maybe it will be another cold winter after all.

    Thanks very much for your input. Really appreciate it.
    Originally posted by Stellaah
    Don't you just want a small mortgage, with a payment holiday for a year or two? You're a bit young for equity release, besides which you'll want to repay the loan when your business takes off.
    No reliance should be placed on the above! Absolutely none, do you hear?
    • Stellaah
    • By Stellaah 17th Mar 17, 6:40 PM
    • 12 Posts
    • 2 Thanks
    Stellaah
    Thanks very much Annie 1960.

    Well done on your project! One of the advantages of stone/cob properties is that much of it is grunt work - hacking out all the wrong things that have happened to it In relatively modern times. (Concrete and cement are a traditional building's enemy.) Mostly its dirty/grotty work that we can do that takes time first, and then money. The work will be done in stages but this is kind of the one we'd have liked to be able to do sooner rather than later. We'll see. Thanks for posting.
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