Stuck in renovation unable to unlock equity

satmanuk44

Hi,

So it a bit of a sticky situation bought a house and decided to put on extension. Ran out of money with the whole everything going through the roof during covid. Now I'm stuck on being able to finish things off.

Current mortgage = £225,000
Zoopla valuing house at £300,000 (without kitchen extension / office and utility room thats been added)

Problem lies with my existing debts which I increased to buy materials / bifolds etc. 

Between me and partner:
Credit cards = £45k
Unsecured Loans = £680pm
Total monthly debt payments = £1700

Credit history in regards to no payments and default is perfect. I can pay existing creditors fine but this gives me no room to get the house finished prob need £25,000. But as the old kitchen was ripped out as part of extension house is classed as uninhabitable. Tried to get re-mortgage but valuation guy said no fitted kitchen = uninhabitable. 

Bridging loans only give 75% LTV.

Can anyone think of any options?

Thanks

jimjames

Fit a cheap kitchen DIY for say £1k or refit old one?  How are you cooking now if you've had no kitchen for 2 years?

Is the £1700 including mortgage? And is the £680 repayment for cards or another loan on top of the £45K?

satmanuk44

its been 9 months, I got a double air fryer, combo microwave, slowcooker and portable hob top all on a kitchen table. Have camping portable sink thats connected to mains and waste.  £1700 does not include mortgage thats £994 on top. £680 is for 2 loans, oh I forgot there is an additional £250pm hire purchase. Joint income is £5800pm. 

ACG

Can you get a secured loan? In the back of my mind I feel like there are 1 or 2 who dont mind if the property is being renovated. That might allow you to consolidate some of the debt. 

Failing that, presumably if you cut back on everything you would have around £2k a month spare? Can you not just pay for some of the work monthly? 

satmanuk44

Secured loan still want a valuation and the no kitchen is an issue. Kitchen I need floor and units and electrics final fix. Thought about puttin in used kitchen but not sure if I then need to complete everything else. Also my extension isnt signed off yet, I can not get that until its complete with the doors on. Chicken and egg. Prob £1k disposable after paying everything. Although I'm stuck in my over draft about £2500 it goes down to each month.

ACG

Speak to a broker. I reckon there could be ways to do a secured loan. 
Also it might be worth googling regulated development finance (the regulated element makes it more likely to be aimed at homeonwers renovating their own home). 

The secured loan we hand off to another firm, the development finance avenue is not really my bag so cant really help. But no harm in trying. 

satmanuk44

I've spoken to 3 brokers so far, all have great sites offering all solutions but when I speak to them the old no kitchen is an issue. I'll look into the development finance, thanks.

satmanuk44

Development finance been told this is basically for If buy some land and they will finance the build on it. I don't really see another way apart from stopping paying current creditors and pay for the work myself after a few months. Stupid I know, it will destroy my credit but I'll have a complete house so wouldn't need to re-mortgage anyway.

RAS

A kitchen requires a sink and a cooker.

Please get a few base units off freegle, or out of a skip if you can prevent them being smashed up. You might even find a counter top. Install a sink from the scrappies and wire in a second-hand stand alone cooker. 

Cost, sparky to install cooker point if you can't use the old one, and plumber to install a water supply, if you aren't confident enough to use plastic piping and fittings. Assuming that you have a basic water and leccie supply?

[Deleted User]

RAS said:

A kitchen requires a sink and a cooker.

Please get a few base units off freegle, or out of a skip if you can prevent them being smashed up. You might even find a counter top. Install a sink from the scrappies and wire in a second-hand stand alone cooker. 

Cost, sparky to install cooker point if you can't use the old one, and plumber to install a water supply, if you aren't confident enough to use plastic piping and fittings. Assuming that you have a basic water and leccie supply?

Completely agree with this. It would make a lot more sense to spend £1-2k even on putting something very basic in (bought from FB Marketplace or something perhaps?) than completely destroy your credit rating that's incredible hard to recover from and although you may not think you need it now, you may do at some point in the future and things change. And you would be left paying v high interest rates so it seems crazy to do that deliberately. You do have spare funds each month to be able to achieve something that resembles a working kitchen, it doesn't have to be pretty. You can always sell those items on again after to recover some funds.

jimjames

satmanuk44 said:

Development finance been told this is basically for If buy some land and they will finance the build on it. I don't really see another way apart from stopping paying current creditors and pay for the work myself after a few months. Stupid I know, it will destroy my credit but I'll have a complete house so wouldn't need to re-mortgage anyway.

What's wrong with the suggestion I made above about a cheap kitchen? You can do that with the amount you have spare each month and no borrowing needed. There is nothing that says what sort of quality of kitchen as long as it is a kitchen and is seen as usable. Plenty of houses being sold have kitchens you wouldn't want to use but are perfectly mortgageable.