Financing a Driveway - Mortgage Advance?

cwhaley1

Good day all! Just looking for some advice on further borrowing on our mortgage.

We bought our house with a 5% deposit in December 2016. No problems getting it - the valuation report came back fine the same day it was completed, no problems with affordability, etc. Currently we owe ~£142,000 on a house costing £150,250.

Unfortunately our driveway is in a poor state that was worsened with recent gas mains works. We need to finance a new one at £2500.

My partner has no loans or credit cards (other than joint mortgage), so we looked at a few options for getting the money. The loans we were offered have high rates (around 24.9%) and there's no way of physically getting cash from the many credit cards we were offered (most even having 25 months of no interest).

Borrowing more on our mortgage seemed the only real way. The minimum we can ask for is £10,000, but that would mean we owe more than the current stated value of the house.

Is borrowing more on the mortgage out of the option? If so, are there recommendations on credit cards that allow money transfers?

We have been good and have saved up for all the work done so far, but the driveway is getting urgent now.. Hoping somebody can share some wisdom and knowledge.

Thank you:)

Ebe_Scrooge

I think you would be unwise to borrow £10k on your mortgage if you only need £2500. What's the point in paying interest on money you don't actually need ? An unsecured personal loan would be a better bet - though, as you've already discovered, the interest rates are quite high. Generally, if you borrow more the rates are lower - but again you're stuck with the dilemma of paying interest on money you don't need.


A money transfer card would be the best option - take a look here : http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs


Even if you apply for a card and don't get offered a high enough limit, you could potentially split it over 2 cards.


But - and this is REALLY important - you absolutely MUST make sure you save up the money to pay the card(s) off in full when the promotional rate expires. Otherwise you'll go onto their standard APR, which is likely to be a lot higher than the 24.9% you were offered on the loan.

Neutrinno

Why would you want to borrow £10k just for the sake of needing £2,500? You would be paying lots of unnecessary interest. Either way you couldn't get any more secured lending when your LTV is 95%, you certainty wouldn't be allowed to lend into negative equity.

If it is urgent then consider an unsecured loan, or money transfer credit card with an initial 0% rate which you can afford to pay off in time.

Since a mortgage isn't possible, maybe another debt/credit credit card sub forum on this website would be more useful for you.

amnblog

You have demonstrated the risks of purchase without leaving some funds in reserve for such eventualities.

Was the condition of the driveway not picked up in your valuation report?

If you had a Homebuyers Report complete and this problem was not picked up you may have recourse with the surveyor.

minimike2

Ask your self, is it really THAT BAD that it needs doing now?

What do you mean by a poor state?

The APR for the loan you are able to obtain is an indication that you are a high risk, meaning you should tell yourself that borrowing that money would be a bad idea.

Save up.

ComputeAngel

if you really need the money, why not borrow £2500 from some money transfer credit card
e.g.

http://uk.virginmoney.com/virgin/credit-cards/money-transfer-cards/

Borrow £2500
Pay: 95*27=2565 (pay 95£ for 27 months)
Interest/fees = £65

armchaireconomist

Unless it's collapsed and you can't park a car on it you don't NEED a new driveway.


Think very carefully about what you're doing

-taff

You bought your house 2.5 months ago.
Would your lender really be willing to lend you more money, enough to put you in negative equity?

I doubt it....

Park on the road.

rtho782

I don't want to sound harsh, but, if you can't call on £2,500 should you need it for something essential (e.g. part of roof collapses and it's raining, boiler breaks and you have no heating, etc etc) I'd be really worried about your financial situation as a homeowner.

Indeed, a new driveway is not a make or break situation - it's possible to park on the road, and I doubt your driveway is worse to park on than say, a field, which it is perfectly possible to park on. Even if you figure out a way to lay your hands on £2,500, I'd be sorely tempted to just keep that as an emergency way to get £2,500 rather than pay for the drive.

We had no savings when we moved in to our place, but we've stayed out of our credit cards and our £5k overdraft just in case. We've done work on the place, but only where we could finance it from savings, with the exception of the sofa which is on 0% finance.

I wouldn't want to be so close to the bone that if I needed to spend £2,500 urgently I didn't know how I could do it.