FTB Mortgage application help

dpalaj

Currently buying first house (council house) and mortgage agreed in principle.

Mortgage is interest only, fixed rate for 3 years with Northern Rock.

£5000 loan for home improvements on top of the mortgage amount.

Bank requires two things to complete the application:
1) Estimates for the home improvement costs
2) Full details of the repayment vehicle to cover the capital amount at the end of the term (25 years)

Advice gratefully received about:
1) How detailed do these estimates need to be?
Planning on getting a new kitchen, bathroom, new flooring in the living room and bedrooms, general decoration.
Because it's a while off before the house would be ours it seems a bit daft to get full quotes now considering we may change our mind about the kitchen we want, bathroom etc or get better deals in the January sales. But that's what the bank says it wants.

2) Was just going to get a cash isa and life insurance for repayment vehicle. Would this be sufficient for the bank's purposes or is it the most suitable investment?

Thanks

tomstickland

I'd advise against adding the loan to the mortgage. It would be cheaper to save up for the work.

MortgageMamma

Why not just call up Northern Rock and see what they say?

Cara79

dpalaj wrote:

Currently buying first house (council house) and mortgage agreed in principle.

Mortgage is interest only, fixed rate for 3 years with Northern Rock.

£5000 loan for home improvements on top of the mortgage amount.

Thanks

Why are you adding £5k loan to the mortgage? You will be paying this back for 25 years or whatever term you have and probably even at the interest only rate?!?!

If you truly can't save up to have the works done bit by bit (not many people can afford to do everything at once unless the place basically needs gutting) then surely it would be better to take out a £5k loan and pay that back over a couple of years or however loans work.

Surely it would be crazy to take a £5k loan out for that. Are you going to do the work yourself? If not, I wouldn't have thought £5k would be enough. I replaced my kitchen (once I'd saved up for it) and that was £3k.

regularsaver1

We can not advise on this site.

However, sounds as though an Isa would not be sufficient as a repayment vehicle

Have you gone directr with Northern rock? - contact them and ask them what they recommend or need