Increased salary and home improvements

JamesBro

Hi

I’d appreciate some advice of how to approach things.

I bought my first home in July and I’m having a baby in February.

The house needed lots of work, so I took out a £10k loan which my partner and I could comfortably repay, even with maternity leave/childcare future costs taken into account.

We got a lot of work to the house done, but still the house needs work. I have estimated it needs about £6,000 more to be spent on it to get to a comfortable standard.

Luckily, a month ago, I got a new job, with a 20% pay increase. I believe we can afford a comfortable £6k increase to the loan/new £6k loan with an extra £100 a month repayments. Is this an OK thing to do? To add to the loan? Would other options be better?

TIA.

[Deleted User]

It's ok if a) you can afford it and b) the lender lets you do it.

Obviously they may be less keen than you, with existing debts and a new job.

JamesBro

Thanks. I did worry about that. It’s just a promotion at the same company, so I’d hope that’d work in my favour. But, yes, the mortgage and the existing loan might work against me, I accept that.

If they reject me, after a credit check, how devastating could that be to my record?

[Deleted User]

Not all all devastating.

It will be a single search on your credit files.

JamesBro

Even if I got rejected by them after a credit check?

Thanks.

[Deleted User]

The result is not recorded.

getmore4less

What about funding some of it by 0% purchase CC

What rates are your current debts.

how much net was a 20% rise.

NineDeuce

What is a necessary standard?

System

I take it this is your first child. I can absolutely guarantee you that no matter what figures you've written down on paper that when the baby has arrived they'll go out the window and the outgoings be more than you thought. Parents seem to go absolutely mental over their first child in the first year buying all kinds of stuff from various baby product outlets they never intended to before it was born. You'll hear "I was out with my mum and we saw this in the shop and baby would look so cute in it I just had to have it" type conversations frighteningly often. Second child is usually far better because you realise from the first that spending a ton of money on toys and designer clothes for 0-6 month olds was mostly money thrown down the drain.

Are you assuming your partner will be returning to work? Despite claims that they will many new mums, especially first time mums, find that in fact they don't want to and don't return for a few years if at all.

Is the work so desperate that you couldn't just do it over time without a loan? Yes it would mean you'd have to live with a compromise for a while but at least you'd not be signing up to something you'd be committed to with serious negative ramifications if you find you couldn't meet the payments. As above even a 0% credit card would be a better option as it would give you some flexibility for a while.

JamesBro

Thanks Tarambor, really appreciate that. I accept that costs for a first child can be worse than initially planned. I do feel that I've worked out, albeit on paper, that we have over £1k spare each month, with all our expenses taken into account as a worst-case scenario. So, even if the child costs £300 extra a month, I still feel comfortable enough.

The house is a heap. We have exposed floorboards, wallpaper hanging off the wall, dust everywhere, wires everywhere and no storage. I need the extra money soon to carpet and put new flooring in, which I'm estimating around £3k for. I need to damp proof the kitchen and bathroom as there is damp in there, and need to do that before the baby arrives for its and the mother's health. I suppose other costs are less urgent.

I have never had a credit card before, so the prospect is more ambiguous in my mind. I have some questions if you wouldn't mind helping me please? How do 0% credit cards work? Would I likely be accepted having just recently taken a loan and a mortgage out? Other credit history prior was just a steady payment of mobile bills etc. I've always been under the impression that a credit card could only help me up to about £1.5k, and, as I need three/four times that, I'd be far too short, no? Or have I got that misunderstood? And, after the 0% interest period is over, is the interest rate then astronomical thereafter?

Thanks for this.

MallyGirl

The limit you get with a credit card is entirely based on your personal circumstances. It will take into account salary, commitments, credit history, all sorts. You may get £1.5k, or £500, or much more. You cannot predict this.
I would run your details through the eligibility checker to see if anyone might lend to you.
I would then work out what REALLY needs to be done - damp issue springs to mind. You are unlikely to be able to pay for this to be fixed using a credit card. You should read up on Money Transfer cards as this is more like a loan in that the money comes straight to your account (for a small fee). The 0% period tends to be a bit shorter so you would need to be sure that you can pay the amount off before the normal credit card rate kicks in - but this can be a good thing as it focuses the mind.