Loan options for £60,000

Help1234

Oh! When I search Google these options come up a lot!

macman

Help1234 said:

Oh! When I search Google these options come up a lot!

Unsecured? I doubt it.

Help1234

I’m not sure if unsecured or secured. It’s given me an 80% chance of approval on a comparison website so I don’t think that’s high enough and I’ll need to go through a broker.

macman

If you don't know the basis of the loan then you need to do more research.
I don't think you have the equity in the property to get a secured loan or 2nd mortgage of £60K, your mortgage is already around 85%, although you haven't stated the current property value.
And even if you can, your earlier responses indicate that you cannot service the interest repayments on such a loan, which is surprising given a joint income of £88K (is this net or gross?).

Grumpy_chap

How has the OP determined the £60k budget for the works that are proposed?
Unless the OP is doing a lot of the labour themselves, this seems like a very keen budget for the work.  The OP needs to be sure on the budget.
Given the OP refers to joint income of £88k, I have assumed both working and therefore the improvement work will need to include professional labour.

How is the joint income split?  Quite a variance in take-home between 2 x £44k or £70k plus £18k but both are joint income £88k.

Current arrangement is:
Property value £475k, mortgage £396k.
LTV just under 85% is good.
Mortgage is 4.5 times salary multiple.

Proposal now is for an unsecured loan of £60k over 25-year term.
AIUI, such borrowing is only available to those that don't need it. 
For the OP, this is a high amount to borrow (absolute and salary proportion) and a long term period - affordability tests may be an obstacle.  It really sounds like another mortgage or secured loan would be needed.
Will the OP's current mortgage lender advance this money?  That is the most likely route to be successful and any other secured loan would need the agreement of the OP's current mortgage lender as this would be a second charge on the property.  I have assumed the OP does not have other assets that could be used to provide loan security.

Proposal is:
Property value £475k (until the works are complete when the OP hopes to realise £600k property value)
Mortgage £456k
LTV 96% (which is high)
Mortgage is 5.2 times salary multiple.

A mainstream lender will look at this as unsustainable, especially giving consideration for likely upward interest rate movements and the risk of the property going into negative equity while the works are underway. 
(The OP could rip out kitchen and bathroom and half-build a loft conversion when the money runs out, leaving a house that is difficult to sell.  The OP may say that definitely won't happen, but a mortgage lender cannot control that.)

It looks as though doing this project with a loan as the OP would prefer is unlikely. 
Can the OP finance through alternative means?
Savings?
Sell a car?
etc.

Vinknut

Help1234 said:

Oh! When I search Google these options come up a lot!

Can you share some of the results you get? As it is extremely unlikely that they will be unsecured.

Sncjw

Why are you wanting to spend 60k on works when your going to be moving. Why live through that and not get much enjoyment from it. 

Vinknut

Sncjw said:

Why are you wanting to spend 60k on works when your going to be moving. Why live through that and not get much enjoyment from it. 

Presumably to bump up the selling price and make more profit out of the sale.

Brie

Everybody will tell you that you won't get the £60k back when you sell the place.  Buyers will look at a new kitchen and want to replace the cupboard doors, the fridge, the oven, the sink.  They might be put off by the fact the loft conversion isn't quite the right size. Garden?  All it's needs a one off gardener to come and mow and get rid of the brambles.  

Move the loo upstairs?  Well that might be a good idea.  In my opinion you need at least 1 toilet for every person in a house or risk traffic jams.  

[Deleted User]

Help1234 said:

My house was bought for £475,000. An identical house a few doors down with the above works sold for £600,000.

I can afford the repayments for a couple of years (I.e get a loan over 25 years and pay £300-500 per month), which is what I have seen the cost would be with a loan calculator. But instead of paying this back over 25 years, I would pay back say approx £10,000 in 1-2 years and then sell and then pay the outstanding balance in one go.

You don't know the house will gain £125k, the house could have been in a bidding war or get lucky, the market might cool in a year or two, it might be in better condition, better options, done to a higher standard etc