Remortgage or something else

shelly2bit

Hi

We own our house and think it is prob worth around £300k. We want to borrow £20k for a conservatory and a couple of other little jobs. What is the best way to finance this.

We are thinking of selling the house next year so would pay back any loan then.

I found a mortgage with no set up fees, early repayment allowed. It says the total repayable over 25 years is £26717 and first year cost is £1100. If we pay back after a year do we have to pay £26k. Interest rate is 2.89% for lifetime of the loan.

Is remortgage the best way to go?

Thanks
Shelly

Thrugelmir

Would you recoup the outlay of a conservatory?

shelly2bit

Hi thrugelmir

We are hoping so plus we want to have the use of it this year and perhaps longer if it takes a while to sell the house. My oh is a builder so is doing the base etc. We are just paying a company to fit the lid.

dimbo61

OH is a builder ? Self employed ? No savings ?
Would the conservatory firm offer 0% finance ?
Loan over 3/4/5 years ?

shelly2bit

Oh is ex army retired with pension. Not working due to house refurb. House purchased for £240k in august. Rest of savings spent on refurb. They do offer 0% but only for 1 year and we want a smaller monthly payment

Lilla_D

In reply to your question about paying £26k if you redeem the mortgage after a year, the answer is "no".

If you take the mortgage on repayment basis, then the original amount of £20k would have reduced through your monthly payments to, say, £19,500. When you redeem the mortgage, this £19,500 will have to paid to settle the mortgage amount (plus any admin fee the lender might have). If you take the mortgage on interest only basis, then you'd only pay interest during the year and your balance would remain £20k. In this case you repay £20k (plus any admin fee the lender might have).