Almost debt free, buying house now, but need money.

lazer-zxr

Hello all,

so here's a question for you.

I am now, virtually debt free, and this has allowed an element of freedom in my life.

With my improved credit rating, we have been able to apply for a mortgage (15 yr term), something we have been wanting to do for a long time.

We have an agreement in principle, and have made an offer on a house, and it has been accepted.

All of this is unbelievable, considering where I was 2 years ago.

The house is a bit of a project, but it's the one we want. It needs heating, electrics and windows replacing. The price relfects this.

Everyone I know have said "get a loan, get the work done so it's more efficient and safe etc etc.", but those people don''t know where I've been with debt.

So I ask you, what would my fellow DFWBs do? It's the house we want, we won't look for another.

1) Do I live in a decrepid house for 2 years, saving up to do the work (2 years time with family in a potentially cold expensive to heat house).

2)Can I approach my mortgage lender and say, "look, I'm going to do the house up, the value of the house will increase, and therefore can I do this with an increased mortgage?",

3)or do I, sharp intake of breath, get an unsecured loan? I'm 37, can afford the loan as both the mortgage payments and the loan repayments would be within the amount I've been paying off my debt, but it will take 2 yrs to pay back the loan.

Any advice, from DFWBs whom I consider the best people to see the situation from my point of view, is very much welcome.

Thanks.

tori.k

Option 4 maybe looking at what immediate essential work needs just to get you in the door and living in a half decrepid house while you save for work to be done.

January2015

I agree with tori.k

Cost the immediate essential work and then plod through the rest. Remember, you don't have to buy everything brand new to renovate your property, e.g. you can get some really decent secondhand kitchens on ebay at a fraction of the cost of new ones.

Personally, I would avoid increasing the mortgage or taking on unsecured debt. I would rather live in what you've bought and enjoy renovating it bit by bit - and knowing I'd saved and paid for each bit of it without increasing my debt

Huge congratulations by the way - you deserve to be chuffed

Ilona

I agree with both of the above. Option 4. My first house was a dilapidated wreck, virtually a shell. Needed dry rot and wet rot treated, floors ripped out and new concrete floors laid, re wiring, needed a new roof but that had to come later. Non existent kitchen, very old bathroom. But I managed. People gave me second hand furniture, I saved up for the jobs to be done, couldn't afford central heating so had to be content with a couple of gas fires in the downstairs rooms.

Now look at me. Through my careful spending and frugality I'm in my third house and I have no mortgage.

Don't overstretch yourself in the early days. Make do with second hand, car boot sales. A lick of paint to brighten the place up, throw a few rugs on the floor, make the living room and bedroom cosy with throws and soft lighting so you can't see the cracks.

It will all come right eventually. You say you will stay in the house, so no rush. It's happiness that makes a home, not the stuff that you own. Best of luck, you have a great adventure ahead of you.
Ilona

enthusiasticsaver

I would also say don't overstretch immediately. A 0% credit card is a possibility for the urgent stuff but we have lived with dodgy bathrooms and kitchens for years and moveable fan heaters when we first started out. You can freecycle, do as much as you can yourself and save up and cost each job as you go. Unsecured loans on top of a new mortgage is not good. Most people also say you should live in a property for a while before starting home improvements so you can see what is urgent. It is coming up to summer so it won't be that cold. House renovations can quickly spiral so keep a very close eye on the budget.

enthusiasticsaver

Do stuff like electrics first. Replacing windows can wait or do them a room or a few rooms at a time. Heating can be done before the winter again either by saving up or doing a 0% credit card and not taking on any other debt until that one cleared.

lika_86

Is there a reason you're going for a 15 year term mortgage? Would having a longer term help you have a bit of breathing space for a few years while you get the work done after which you could remortgage?

lazer-zxr

Thanks everyone.

From the input above, I think I'll go with enthusiasticsaver's suggestion, and get the electrics done, and then work to save for anything else.

The reason I'm going for a 15 year mortgage is probably due:

1) I can afford it
2) My debt free journey training me to get rid of debt as quickly as possible.

bouncydog1

Why don't you initially go for a longer mortgage term to reduce the repayments, save the difference and use this to help fund the projects? Then as they are completed you can throw the money at the mortgage to overpay and pay off within the 15 year timeframe. You will need to ensure that the mortgage provider allows overpayments.

MakeAChange_2

Most of my best items around my home come from random places that were mega cheap, I think take the advice given and just be careful, set a realistic budget on each room or each project and do not go over it!

Or set a "be great to spend less than" and "will not spend more than" , keep like a project planner book and document all your savings, salvaged items, freebies, and how you feel after each project is completed. This will keep you focused and be a beautiful "look what we achieved" book! Add photos of before and after.

Well done on all you have done so far, you have given me hope that I can also get a mortgage in a few years as that's my dream.

bsclp118

I think going for a longer repayment time so you have lower payments initially and more money towards the work sounds reasonable? Once it's done you can then focus on making overpayments and shorten your mortgage that way?