Financing remodel

McNeely

Hello,

This is a question about the best way to finance a remodel, or the pros and cons of different options.

We're buying a house for £220k: three bed terrace. We're hoping to re-do the kitchen and bathroom, and are looking at around £40k for the work. After putting a minimum deposit down, we have around £10k in cash. We could save for a year or two and be able to do the remodel all in cash, but would rather not have to wait.

I suspect the options are (1) secured loan, (2) unsecured loan. And perhaps a combination. So here are the questions:

1. Where should I look for these loans?
2. Having just bought a house about £30k below the maximum the bank would consider, will we still have any credit with which to get these loans?
3. Is there another option?

Thanks to all for their feedback.

DCFC79

Look at the high street banks, the other lenders like Tesco Bank, Sainsburys Bank, theres loads of lenders you can consider.

Whether you can get a loan at a favorable rate depends on your credit history and how much a risk the lenders see you to be having recently bought a house.

Have you bought the house yet as you say "We're buying" or do you mean the mortgage is in place to buy ?

Ive seen on the forums it mentioned about leaving a period between buying a house and applying for a loan.

Tixy

If you are only putting a minimum deposit on the property then a secured loan won't be an option, as there won't be sufficient security in the property for a lender.

Whether you would be able to get an unsecured loan will depend on your financial situation, but after just taking on a large financial commitment it is likely that potential lenders will want to see you managing your new mortgage commitment for some months before considering extending further credit to you.

Most lenders won't lend in excess of £25k unsecured on an indivdual loan. And will only generally lend that sort of figure to high earners with comparatively low financial commitments.

If you haven't yet completed on the house definitely don't apply for any loans yet. Even credit search applications can impact on the mortgage lenders final decision.

I would look to use the £10k cash you will have to do any urgent work and then wait at least 6months before applying for a loan, hopefully you'll have saved up another sum of money by then so will need to borrow less at that point.

TrustyOven

McNeely wrote: »

We could save for a year or two and be able to do the remodel all in cash

Do that.

McNeely wrote: »

but would rather not have to wait.

That's a bad way to think about things.

Unless the kitchen units are falling apart and the bathroom is leaking, it makes sense to save and not use a loan. Who knows, maybe 6 months into your purshase something else needs replacing, and is a higher priority than having a remodelled kitchen / bathroom. Then maybe you will be overstretched (having taken the loan for the unnecessary remodelling) and therein lies disaster.

ciderboy2009

William_Chris wrote: »

Hello Dear,
My name is Mr Alex Westwood, i am from CANADA, married to sarah westwood, with three kids.

You've just got to read the first few words & you know it's a scammer!
Reported.