Mortgage free but need to borrow.

I have a property valued at 260 000 poundswith no mortgage want to borrow 30000pounds for home improvements should it be a short term loan or a mortgage . nay help greatly appreciated Grae 16

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  • I'm just finishing building a house and will end up with a outstanding amount of about £30k also. Would be interested to see what the money saving experts could suggest. Mortgage / Unsecured Loan or could money be saved through card tarting a few thousand of it too?
  • jamesd
    jamesd Posts: 26,103
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    How long will it take you to pay off the 30,000? If the answer is more than five years, a mortgage is likely to be the better option.
  • I could do it in 5 years. Just wondering what the best way then is to do it to get hit with least interest.
  • jamesd
    jamesd Posts: 26,103
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    Alan, please see the Mortgage Adviser Code of Conduct and make the necessary adjustments to your profile, post and PMs. I see that one of the other brokers referred you to it a week ago but you're still not following it. It's not in any way optional, so best to modify before someone complains and seeks enforcement of it.

    wholehearted, it sounds as though a mortage is your best option, since a mortgage will probably be at lower rate than an unsecured loan.
  • Moonbeam
    Moonbeam Posts: 490 Forumite
    We had this decision to make a couple of years ago and decided that the best route was a mortgage - however, we made sure it was a fully flexible one and have been making regular overpayments to it to reduce the term.

    We decided that in the end if we were in a position where we were going to default they would take the house irrespective of it being secured or unsecured, so we wanted to take advantage of the lower APR offered by taking out a mortgage.

    The mortgage we have also has no redemption penalties so we can pay it off at any time (assuming we get a windfall) and in the meantime we hardly notice the £100 or so minimum payments going out each month.
  • Rafter
    Rafter Posts: 3,850
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    Although possible, getting £30,000 unsecured in one go is pretty difficult.

    Agree with Moonbeam that a fully flexible mortgage is the way to go. Alternatively have you thought about an offset mortgage so any balance in your current account is tax free and reducing your mortgage interest bill too?

    Also if your home improvements are going to be over some time, you can then draw funds as you need them and not have them sitting in a tax paying savings or current account in the meantime.

    R.
    Smile :), it makes people wonder what you have been up to.
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