Need to raise 10k for new kitchen - best way of doing this?

Beckymarshall07

Hi all
Me and hubby looking to borrow around 10k to finance some building work and new kitchen should we be succesful in buying our first home.

We've had a disagreement over best way to finance this. In short I'm in favour of doing what Martin Lewis says about using credit card and then egg card to shift balance from credit card to current account and then being a credit tart doing balance transfers/transfer to low interest credit card.

Hubby says cant get 10k credit card and that a loan may be easier as its less hassle. We havent done the maths but surely over 5yr repayment period we'd save a bit doing credit card tart thing? Couldnt we just take 2 credit cards - one in each name and finance project in this way? Would it really be worth it to do this in the long term? We've both got good credit ratings. Thanks in anticipation.

mrcow

How much do you earn? It will make a big difference to how much a credit card company is willing to lend.

If it's for home improvements, why not shop around for a good deal on a flexible mortgage when you buy the house anyway and just over pay? Credit card shuffles are only good if you can actually get the credit in the first place and are sure to be able to get the deals repeated by other cc companies. You'll still have to pay a BT fee on most deals anyway.

How much deposit have you saved up?

Beckymarshall07

hi mr cow we have a 10% deposit and our combined income is about 60k. Not sure what you mean by a flexible mortgage as no mortgage provider will lend you more than cost of value of house? Sorry new to all this being a FTB

mrcow

lol by "flexible" it means that you can make overpayments if you want to (ie you wouldn't be paying for your kitchen over the next 25 years and spending a fortune on interest payments, just over the next couple of years with your overpayments).

Reasons for me asking how much deposit you have is because it will make a difference to how much you can borrow.If you didnt have much of a deposit, then extra mortgage borrowing would not be feasible and if your income is not up to much then overpayments could be a struggle.

haggle_2

Can you not just wait until the property market goes down another £10,000 then use the moey you save to do the kitchen?

countrygirl84

If you do the credit card transferring thing, you have to be sure that you will be guaranteed a good enough limit each time you transfer. And, as it was pointed out earlier you will also have to pay a blance transfer fee which can be 2.5-3%. Me and my partner have the same income as yourselves and I have recently struggled to get a new card with a good enough limit to transfer (£4k) because of the way things have been. I managed in the end through Barclaycard who gave me £8k but if I hadn't, I would've been stuck paying 14.9% on my old card until I could do something about it.
Aswell as looking at transferring onto 0% credit cards all the time, look at lifetime transfer rates. I have just taken 5% for the lifetime of the balance (which is cheaper than a loan or a mortgage). And that didn't have a transfer fee to pay. Credit cards also allow you flexibility which may come in handy owning your own house in-case something crops up.
Get a quote for a loan and work out if you will be able to make the payments as well as your mortgage and all the other bills that you will have to pay now being a homeowner.
I think you would struggle with the mortgage thing as most companies will only borrow you <90% of the property value at the moment. Although a couple of companies have quite good deals on for <95%. Get a quote and see if it possible to do this. If you take a fixed deal then most companies will allow you to overpay by 1% of the mortgage owed each year so you could overpay as much as you're allowed.
Me and my partner were in a crap position last year. We bought a house in the process of me changing jobs and didn't have a deposit or any money to buy anything for the house at all. In the end we took a deal with Northern Rock (before all this carry on started). We borrowed 75% of the house value as a mortgage and 30% as an unsecured loan (105% in total). We only fixed in the deal for 18 months though as we knew that our position would have changed dramatically within that time. Luckily for us, we have a great income now, spent the extra 5% wisely and have put our house value up by 9% with all the stuff that is going on at the moment. We remortgage in 4 months and are in a great position to do so now. So it isn't all doom and gloom with the mortgage industry.
Anyway, if I were you I'd look at the credit card options, get a loan quote, a mortgage quote and work out the best for you and your partner.
I know this is a long reply but I'm not too good at explaining things.
Good luck hun. x