Renovate bathroom on credit before remortgage

BoingBoingBaggies

Hi all,

Me and my wife own the house we live in and our 2 year fixed deal finishes in Feb next year.

Our bathroom is in DESPERATE need of renovation, we moved into the property just over a year ago and it was a complete refurbishment job. Did everything except the kitchen and bathroom (kitchen can wait a bit longer - not too bad).

We bought the house for 238k, we know it is probably worth around 270k now. Our mortgage on it by Feb next year will be around 205k.

We are toying with the idea of taking out 5-6k on interest free money transfer credit cards and doing the bathroom this summer, before paying off the credit cards with additional borrowing when we remortgage. This would be plan A.

Or we could not touch the bathroom until we release the money in February. This would be plan B.

Any flaws with plan A?

My thinking is that having the bathroom done when the house is valued for the remortgage will increase its value and we may get a more favorable interest rate. Although that is offset by the extra interest i am paying on the additional borrowing, but i am taking out the additional borrowing anyway? So to do it on a more favorable interest rate would be better?

We have no other credit card debt, a bank loan with a remaining balance of 21k. Our household income is 80k.

Farel01

Is option C possible; paying off the credit cards without additional borrowing? I'm obviously not aware of your finances, but would you be able to borrow the money and pay it back over a year or two? Might be problematic if you want to remortgage with another company, but maybe something to look at. Increasing your mortgage to cover debts increases the interest you pay quite a bit...

PasturesNew

For the remortgage they might not even see the house - at best a surveyor might simply drive down the road to confirm it's still standing/not burnt down. "Is there a house there?" Yes. Job done.

Plan A fails if you lose your job, or if the housing prices stagnate and mortgage companies are told to "go careful" and start to not value homes at more than their last valuation price by more than a few quid.

In short: How far up !!!! creek would you be if you didn't get the remortgage funds.... or if you lost your job? You're so close to the finishing line, why not just be a bit more patient.

Farel01

PasturesNew wrote: »

For the remortgage they might not even see the house - at best a surveyor might simply drive down the road to confirm it's still standing/not burnt down. "Is there a house there?" Yes. Job done.

Plan A fails if you lose your job, or if the housing prices stagnate and mortgage companies are told to "go careful" and start to not value homes at more than their last valuation price by more than a few quid.

In short: How far up !!!! creek would you be if you didn't get the remortgage funds.... or if you lost your job? You're so close to the finishing line, why not just be a bit more patient.

Wat pastures here is not quite spelling out is that a new bathroom might not change the value of your house at all if they do a drive by valuation, so if you definitely want to do up the bathroom don't do it in the expectation the value will increase.

Are there some low cost improvements you can make to tide you over? New towels, painting the grout of tiles, new shower curtain etc. can actually make a pretty huge impact.

BoingBoingBaggies

We gave it a lick of paint (walls and tiles) but it is in a terrible state. Its worse than some bathrooms my wife had when she lived in a student house!

We've got 2 young children too, it needs doing, no doubt about it.

I get what you're saying about the valuation. If that is the case then i would submit the valuation at current + £5k anyway. If they have any questions they would come inside wouldn't they?

Hmm, not sure what to do. Having had big credit card debts in the past and paid them off, not having a penny on a CC like at the moment is quite refreshing. Putting 6k on credit card doesn't really appeal, but for some reason i don't mind having it on the mortgage, even though i know it will cost more in the long term!

I guess its more of a question as to whether i'm averse to interest free credit card debt, just because it is credit card debt.

glosoli

Just be cautious when it comes to thinking you'll be able to consolidate debt onto your property, as many adviser's see it as a regulatory minefield, and they may not recommend that you do it.