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Why Can't I get a home improvement loan?

ck1976
ck1976 Posts: 3 Newbie
First Post
edited 1 February 2022 am28 11:27AM in Loans
I am currently renovating a barn which has a value of around £650,000.  I do not have a mortgage, or any loans or any dependents.  me an my partner are both self employed.  I earn £27,000 per year.  We live at the barn address which was only created by the council last year, so the address is only 6 months old
I am looking to borrow around £45,000 to complete the renovation and i just keep getting told I do not meet the criteria, but i have no idea why? is it because the address is new?
Can anyone advise?  
Many Thanks 



«1

Comments

  • Is this an unsecured loan in your name only? It could well be down to how much you are asking to borrow. It’s much more than a full year’s salary, which is pretty high.

    How do you plan to service such a large debt?
  • MEM62
    MEM62 Posts: 5,116 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I would say that its because your salary is too low.  You are asking for 166% of your income.  That's not going to happen.   
  • A mortgage is probably going to be the better option.
  • Grumpy_chap
    Grumpy_chap Posts: 17,036 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Combo Breaker
    OP earns £27k
    Loan required £45k
    Will it be a joint loan with partner?
    What does partner earn?
    Lenders may also consider whether either the OP or partner were impacted by COVID in their self-employed businesses.

    ck1976 said:
    I am currently renovating a barn which has a value of around £650,000.  I do not have a mortgage, or any loans or any dependents.  me an my partner are both self employed.  I earn £27,000 per year.  We live at the barn address which was only created by the council last year, so the address is only 6 months old
    I am looking to borrow around £45,000 to complete the renovation and i just keep getting told I do not meet the criteria, but i have no idea why? is it because the address is new?
    Can anyone advise?  
    Many Thanks 




  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 1 February 2022 pm28 1:07PM
    Do you have any other debts or financial committments? What's the nature of the improvements? 
  • Thanks for the comments

    I asked for a 45K home improvement loan over 10 years. 

    I did look for a mortgage a few months back, but I was told by RBS and Barclays they wouldn't lend as we had been impacted by covid.   
    The property is in both our names, so i asked for the loan in both our names. 
    The conversion of the barn to a residential property is 75% complete, we just need the 45K to finish it of the property - so some windows, doors, fire place,  pointing,  etc the finished value of the property is £650,000 plus

    I have no other dept. but my partner does have a small loan. 
    He will also be doing some work on the property so may not be earning much

    I thought it would be easy to borrow 45K against a property valued at £650,000? 
  • Unsecured loans are not very likely above 20-25k unless you're earning tonnes of cash, hence mortgage suggestion
  • ck1976 said:

    I thought it would be easy to borrow 45K against a property valued at £650,000? 
    I think that you are contradicting yourself here. Borrowing againsgt the property would tend to be a mortgage, but your earlier post implies that you are borrowing unsecured.

    Needing to borrow over ten years is a bit of a red-flag, that;s an awful long time for an unsecured loan, and sugggests that you are badly stretched.
  • I understand, thank you. 
    I need a mortgage against the property, but i cant seem to get a mortgage either?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 1 February 2022 pm28 6:10PM
    ck1976 said:

    The conversion of the barn to a residential property is 75% complete, we just need the 45K to finish it of the property - so some windows, doors, fire place,  pointing,  etc the finished value of the property is £650,000 plus


     
    That doesn't meet the criteria of a home improvement loan with mainstream lenders. Try a mortgage broker for alternative avenues. Finished value is of no consequence. It's the value and saleability in it's current state. 
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