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£50k Loan for Home Improvement
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flat_broke
Posts: 19 Forumite
in Loans
I'm looking to carry out a single story extension which have estimated will cost £50k.
I'm looking to find out the best way to finance extension.
We have a mortgage of £270k while our property is worth approximately £340k.
I earn a salary of over £90k.
I have very little in savings (approx £10k) which I don't really want to touch.
What type of loan should we go with? Can I take out two personal loans for £25k each?
I'm looking to pay the loan back over 7 years.
Thanks!
I'm looking to find out the best way to finance extension.
We have a mortgage of £270k while our property is worth approximately £340k.
I earn a salary of over £90k.
I have very little in savings (approx £10k) which I don't really want to touch.
What type of loan should we go with? Can I take out two personal loans for £25k each?
I'm looking to pay the loan back over 7 years.
Thanks!
0
Comments
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Speak to your existing lender first.0
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You are unlikely to get accepted for 2 personal loans totalling £50k.
Your savings are probably not earning as high an interest rate as you would pay on a loan, so I would possibly rethink not spending them.
Obviously you are already at 80% loan to value but usually a mortgage increase/ secured loan would be the most common way to fund an extenstion. Have you spoken to your mortgage lender?A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
Unfortunately my existing lender (Bradford and Bingley) are no longer offering new loans since being nationalised. I also do not want to change my mortgage as I am on a good rate (2% above BoE).0
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You are unlikely to get accepted for 2 personal loans totalling £50k.
Your savings are probably not earning as high an interest rate as you would pay on a loan, so I would possibly rethink not spending them.
You're right about not getting much return on the £10k, but for me that's emergency cash which I like to know is available should we require it for any reason.
Thanks!0 -
flat_broke wrote: »Unfortunately my existing lender (Bradford and Bingley) are no longer offering new loans since being nationalised. I also do not want to change my mortgage as I am on a good rate (2% above BoE).
Doubt you'll get unsecured loans of that value.
Secured loan on the property would be expensive.
Unlikely that you could remortgage to a £320k mortgage takes your mortgage to a very high LTV.
Pay down your mortgage and build some more equity.0 -
Thrugelmir wrote: »Doubt you'll get unsecured loans of that value.
Secured loan on the property would be expensive.
Unlikely that you could remortgage to a £320k mortgage takes your mortgage to a very high LTV.
Pay down your mortgage and build some more equity.
Building more equity will take a fair amount of time. It's a shame that secured loans aren't more competitively priced as I have enough spare cash to afford the monthly repayments but dont want to pay circa 11% and more that many of them are offering..0 -
If you do take a secured loan at a reasonably high interest rate now once your extension has been built you may be able to remortgage to a more competitive rate. And an unsecured loan likely wouldn't be cheaper anyway (even if you could get a loan for say £25k of it).
Obviously you are slightly limited if you don't want to switch from your existing mortgage lender - but it may be worth paying a higher interest rate on £11k than lose your good deal with them. At some point if the B&B deal becomes less competitive you could always try shopping around to remortgage the whole lot then.
Alternatively could you delay the extension for a couple of years and significantly boost your savings that way? what can you save a month towards it? £750? could you save more than that on your salary?
That plus with your existing savings would mean you'd then be looking at borrowing half the original amount.A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
flat_broke wrote: »Building more equity will take a fair amount of time.
You have a salary level that most people can only dream of. Ultimately its personal choice as to what ones priorities are.0 -
Thrugelmir wrote: »You have a salary level that most people can only dream of. Ultimately its personal choice as to what ones priorities are.
I have an expensive wife.0 -
flat_broke wrote: »I have an expensive wife.
BTW - it only took me a few minutes to find someone offering a £50k loan at 8.9% over 7 years... works out at £793.24 per month0
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