New homeowners - loan or credit card?

Katastrofee_2

Hello all

My partner and I have just bought for the first time - a renovation project as my other half is a builder. All of our savings etc have gone on the deposit, but to make the most of the Jan sales we wanted to buy the bathroom and kitchen asap, meaning we'd need to buy it on credit.

We estimated about £10,000, so wondered what the best option would be for borrowing over a short period without having to pay back too much over the borrow.

We are planning on opening a joint bank account for bills etc, so wondered if it would be best to get a loan with this joint account? (we were thinking HSBC)

Or should just one of us get a 10K loan from our respective banks? (he's been with HSBC 10 years, I've been with Barclays 10 years)

Or separately borrow £5k each from our banks?

Or get additional credit cards (we both have £1k credit cards from our banks which will be on limit for the next couple months)

This is all very new to us! We're looking to find the best option for repayments (we don't want to be repaying for over a year) and don't want to leave lots of footprints on credit ratings! Any advice gratefully recieved!

Kat

jonesMUFCforever

What can you afford to repay each month should be the consideration here IMO

To me you seem very under capitalised for this project - I hope it does not go tits up for you.

MFWannabe

It really depends how much you can afford to pay back each month; without stretching yourselves too far. How long will you need to pay it back?
One of the better options would be to get a 0% for purchases credit card (one each if you don't get enough credit limit). Have a look in the link on the forum for ones with the longest 0% time on purchases

Katastrofee_2

Thanks Freez - this is what I was thinking. Tesco looks good and as I already have a clubcard they have good deals. But do you ask what you want your limit to be then they reject/accept, or do they tell you how much you are eligible for upon application? As the amount we can borrow will be the deciding factor

On the loan side, a general calculation on HSBC's site says a £10k loan over 12 months is a repayment of around £800pcm, which we can comfortably afford jointly after mortgage and bills and each of our personal outgoings.

However, if there is a chance of us both being able to get credit cards and pay no interest for a year we'd much prefer that!

But don't want to damage credit rating by repeatedly applying for bits and bobs!

[Deleted User]

doubt you would get a 10k cc or even 2x5k cc`s as a starting limit.
are you on the electoral role for your new address?if not no one will lend till you are

Katastrofee_2

We're on electoral rolls for the postal addresses that we've used for over 10 years, which are still our parents' homes, but not at new address as we won't get keys until end Feb.

Not expecting 5k on credit card straight off, but perhaps extending current Barclaycard (£1k limit atm) then applying for a new 0% CC for 12/13 month to buy kitchen?

I know I could get a loan with barclays. They've already guaranteed me 25k but neither do I want that much nor do I want long term or unfavourable rates, so I think I might try the cc route.

But, the question is, considering we've got a mortgage in principle and won't exchange contracts until 6wks at least, can I apply for any of these things without it affecting the credit rating that they've already taken for the mortgage in principle? Or is that already done and decided and anything I go for now won't affect it?

Thanks for all your help so far!

MFWannabe

If the mortgage has not been finalised yet then i wouldn't apply for anything until it is; how stuck are you going to be if they withdraw the mortgage offer!!!

Katastrofee_2

Thanks Freez, that clears it up. I wasn't sure whether the DIP went on our status at the time, or at exchange of contracts.

Don't want to jeopardise the rates we've been offered as they're pretty good, so we'll leave further credit well alone until exchange of contracts!

However, after then, I how much will it matter if I apply for a cc of a few grand, then get rejected? I've never had any rejections before, as I've never really applied for anything out of the ordinary* and never gone beyond my means (low overdraft, low credit card) but as such my credit rating is only fair. I've no missed payments, store cards, loans, CCJs or etc

Thanks for all your help!

*until a mortgage!!

PNPSUKNET

sales can drop through at the 11th hour, so I wouldnt