Best way to finance home improvements

lobster123

Hi,

I need to carry out some home improvements to my house which include a new kitchen and roof and I'm looking to borrow £25-£30,000.

I currently have an endownment mortgage (£26,000) which is due to finish in around 4 years time. Would I be better off taking out a loan - Sainsbury's are offering 8.1% for £25,000 over 5 years (total interest paid £5281) and Tesco at 8.3% over 7.5 years (interest £8326). Seems such alot of money

Or. should I remortgage? I'm currently with the Bank of Scotland and pay around £93 per month plus the endowment of course. Interest I think is around 4.5%.

I'm at a loss and would appreciate some advice. Thanks

opinions4u

You don't tell us property value or income.

But assuming you have equity and affordability, I'd remortgage.

Take a look at First Direct for low rate trackers and Yorkshire Building Society for decent fixed rates.

chalkie99

£20 a week interest for £25k upfront doesn't seem that much , especially when so many people default.

However, those rates you quote are only the "representative" rates, available only to the cream of customers and you might well find the actual rate you are offered (if a loan is actually offered at all) might well be much higher.

Do you have other credit at the moment? Either way you will need a substantial salary to obtain an unsecured loan of that size.

Re-mortgage might be your best option but don't forget to factor in arrangement fees.

lobster123

Hi, thanks for the replies. I only have an interest free loan for £4,000 for furniture, payable at £75 per month. Joint income of £62,000 per annum.

lobster123

lobster123 wrote: »

Hi, thanks for the replies. I only have an interest free loan for £4,000 for furniture, payable at £75 per month. Joint income of £62,000 per annum.

Forgot to say, I reckon my house is only worth around £80,000 at the moment.

somethingcorporate

For a personal loan they will only look at your income. It would need to be in the region of £50k without any other credit commitments (and a squeaky clean credit record) to support such a loan.

I think your only realistic option would be to remortgage since you have the equity in the property.

lobster123

somethingcorporate wrote: »

For a personal loan they will only look at your income. It would need to be in the region of £50k without any other credit commitments (and a squeaky clean credit record) to support such a loan.

I think your only realistic option would be to remortgage since you have the equity in the property.

Hi, thanks for the advice everyone. When you mentioned £50k, do you mean as a joint income?

I'm also squeaky clean

CLAPTON

25-30k seems a lot to spend on a property worth 80K

tell_it_how_it_is

If you have a small mortgage and a joint monthly income of nearly £4k a month, could you not just save a fair wadge of your disposable income over the next few months, and get things done in stages? It'd certainly save you a sh*tload of interest charges.

lobster123

tell_it_how_it_is wrote: »

If you have a small mortgage and a joint monthly income of nearly £4k a month, could you not just save a fair wadge of your disposable income over the next few months, and get things done in stages? It'd certainly save you a sh*tload of interest charges.

Saving up would be the best option. However, it would take me considerable time to accrue the sort of money I need. However, it has got me thinking......

As for the other person's comment on spending a large amount of money on an £80,000 house.......I'm in the position to buy an expensive kitchen because I don't have a huge mortgage! Plus, if the roof needs fixing or I need a new one.....well ????

property.advert

One question which has to be asked is where the excess income over the past few years has gone and why that is not available to buy this expensive kitchen ?