Secured loan instead of re mortgaging for home improvements due too lower credit score

MrsChillers

Hi,

We are so desperate for home improvements and after 10 long years feel enough is enough!

I have managed to complete my IVA 18 months early but know it will still affect my credit score for just over another year, plus we have a fantastic fixed rate with our mortgage provider for another 2.5 years at a delicious 1.9% so re mortgaging is not an option at all.

We roughly need between £40-50k for home improvements and are looking into a secured loan, with the aim to pay this off when we re mortgage in 2.5 years with a new fixed rate. After reading the advice though on MSE, I'm now worried about doing this. I want to be smart with money and not make mistakes. 

Has anyone been in a similar situation before? If so what did you do? We aren't keen on taking out the credit as things became so difficult and messy years ago so we work hard at budgeting and our cautious about any kind of borrowing (basically we don't really). Apart from the mortgage, we are now debt free!

How can we get these much needed home improvements done? What is the smart way of going about this do you think? If we wait another 5 years with a miserable, mouldy, leaky kitchen, I think I will lose my mind. 

Thanks for reading!

sammyjammy

You don't need 40k for a new kitchen, why not save and do it bit by bit, looking at borrow large amounts of money immediately following an IVA is not a good sign, especially secured lending.  A secure load is not going to be cheap.  What is your long to value on your house?

Brie

You might do ok with a kitchen refit being done by a national DIY company with an orange logo.  I was surprised at the credit limit they gave me for 4 years at 0%.    But I do agree - unless there's major structural work to be done I don't know why you need £40k for a kitchen.  Ours was less than half that including all the appliances.

MrsChillers

Sorry I should have mentioned we we are hoping to have our current kitchen knocked down as it is an old extension that was here before we moved in and was badly built. Then to have it rebuilt and extended along the back to give us more space/open plan living for our family and to add some value to the property, hence the the £40k figure.

MrsChillers

LTV 46% I believe!

MrsChillers

Yes I am more than happy to keep costs down and visit the Orange Logo shop, I love them! We have been recommended Howdens by a fantastic builder. The house definitely needs structural work, it was poorly maintained for a long time before we purchased it 10 years ago and we have done what we can along the way but kids and pandemic/cost of living crisis later has limited us. Now we are potentially in a position where we may be able to start working on the house we want to look at what we can realistically do but also are wanting to be cautious moving forwards.

Hoenir

MrsChillers said:

Then to have it rebuilt and extended along the back to give us more space/open plan living for our family and to add some value to the property, hence the the £40k figure.

£40K doesn't go far these days.  Perhaps continue to save. While undertaking a full costing for the work you'd like to have done.