Homeiprovement Loan Or Personal Bank Loan

Janine_2

Dear all,

Just checking if you could give us some advise. The house we are buying needs approx £14500 worth of work doing to it. The mortgage advisor recommended us to take out a normal personal bank loan rather than a home improvement loan on top of the mortgage even though the interest rate will be higher. She has explained it couple of times the reason why but I still don't understand why. Also we are not going to ask for the whole £14500 approx £5000 as we want to do it up as we go along.

What did you go for, and doeas anyone know what she means?
Thanks

Rafter

Possibly a personal loan on the improvement element will be cheaper than paying a high rate for your whole mortgage?

It might also be that the home improvement loan would tip you over a certain percentage borrowed which means you might have to pay a 'higher lending charge'

Personal loans are fairly good value these days though and as long as your credit rating and income are ok you should be fine with one - it may be worth getting something flexible if you are going to draw it down as and when you need it.

Might be worth finding one with no repayment penalties too so in 3-5 years time when you remortgage you can combine the two at the lowest possible rate.

Try northern rock or egg and don't pay over the odds for payment protection insurance.

Good luck.

R.