Complicated (and stupid) renovation debt scenario - desperately need some advise

hgre

Stuck in a tricky spot and feel our next decision could make or break us financially...

In 2023 we bought a house which needed a lot of work to get it to where we wanted - in hindsight this seems stupid as it was our first house. We had a small pot of savings to start us off but this quickly ran dry and since we've been funding the work both out of our pockets and via personal loans for the more expensive jobs (my initial plan was to consolidate a lot of the debt when the house was complete). I've been doing most of the work myself and we've also been living in the house too which has saved us a fortune but comes at the cost of added stress and still isn't cheap...

Long story short we've done the majority of the work but have racked up so much debt that our outgoings are becoming unmanageable and we still have 1 big job left to do - the kitchen. My big plan is to somehow secure funding to finish the house so that we can then revalue and remortgage to consolidate a lot of the debt. However, my mortgage provider is refusing me for additional borrowing to finish the kitchen due to our already astronomical outgoings. I want to avoid using our equity to consolidate our debt before the house is finished as this could leave us living in our unfinished house potentially for years before we'd built up enough funds or equity to finish it. I realise i might be delusional in thinking we could borrow any more but we would have a clear route to rebalancing things once the house is finished. 

I've considered seeing a financial / mortgage advisor to see if they can give me some support or help me plan out a route to getting everything sorted but thought i'd come onto here first to see if anyone could offer some advise...

joedenise

It's never a good idea to consolidate debts particularly onto a mortgage as you're then putting unsecured debt onto secured debt.

It would be helpful to people on this board if you were to post your SOA (Statement of Affairs) to see if there is anywhere to cut your spending.  I think you need to live with your kitchen as it is until you have paid off most, if not all, of your debt and at least save some of the cost of the kitchen.

Probably not what you wanted to hear but my two-pennoth.

gwynlas

Whilst you probably have plans for the kitchen have you considered sourcing one second hand as they are often available on line even sometimes free?
If you go for something with more units than you need you will have a better chance of designing a layout that suits your space.
Whilst I agree it is not a good idea to consolidate unsecured debt into a mortgage if the work carried out as enhanced the value of the property this perhaps is justifiable

Brie

It's quite a normal thing to NOT recommend consolidation of debt whether that means paying off credit cards with a new loan and certainly not turning unsecured debt into secured debt.  Your mortgage provider will be trying to work to your best interest by not allowing you consolidation and I don't think a mortgage adviser will be able to get someone else to come up with a different answer.  Sorry.

But yes - if you post a statement of accounts (see the link in my signature) and then post it back on here the advisors on the debtfree wannabe board will be able to help you hopefully find a solution to your budget issues.  

Meanwhile I'll move this over to that board so it's easier for people to pick up.

katsu

Can you get a christmas temp job?  Can you really cut your outgoings? 

If you are struggling to meet your debts at the moment then it seems a good time to wait before doing the kitchen in a big way as you are able to live in the house now. 

You've had the tip about looking at cheap options, maybe that's a better plan for the next 2 years whilst you get the debts down a bit more? 

Adding them to your mortgage could reduce your monthly outgoings but turn them into a 25 year debt repayment. 

It's hard to hear that you can't have the kitchen you want now, but maybe it's much better to decide not to.

tigergambit

hgre said:

Stuck in a tricky spot and feel our next decision could make or break us financially...

In 2023 we bought a house which needed a lot of work to get it to where we wanted - in hindsight this seems stupid as it was our first house. We had a small pot of savings to start us off but this quickly ran dry and since we've been funding the work both out of our pockets and via personal loans for the more expensive jobs (my initial plan was to consolidate a lot of the debt when the house was complete). I've been doing most of the work myself and we've also been living in the house too which has saved us a fortune but comes at the cost of added stress and still isn't cheap...

Long story short we've done the majority of the work but have racked up so much debt that our outgoings are becoming unmanageable and we still have 1 big job left to do - the kitchen. My big plan is to somehow secure funding to finish the house so that we can then revalue and remortgage to consolidate a lot of the debt. However, my mortgage provider is refusing me for additional borrowing to finish the kitchen due to our already astronomical outgoings. I want to avoid using our equity to consolidate our debt before the house is finished as this could leave us living in our unfinished house potentially for years before we'd built up enough funds or equity to finish it. I realise i might be delusional in thinking we could borrow any more but we would have a clear route to rebalancing things once the house is finished. 

I've considered seeing a financial / mortgage advisor to see if they can give me some support or help me plan out a route to getting everything sorted but thought i'd come onto here first to see if anyone could offer some advise...

Hi @hgre , having been in similar situation I think that this is a cash flow problem as much as anything. You need to start by getting a valuation on your property as it stands and as it would be with a new kitchen. You can then speak to a mortgage advisor on your best move. You should not have to pay unless you take out a new mortgage. I don't see anything wrong with increasing your mortgage in this case as you have added the value.

So it all depends on how the figures stack up. You should, as suggested, be looking for an ex display or second hand kitchen. We got an ex display one with real wow factor and all white goods, marble worktop etc for £11k, reduced from 29k so it is possible.

Get the valuations and come back with some figures and people here will be more able to provide guidance.

FluffyBabyPenguin

I know people who've had their kitchens upgraded very nicely, while reducing a lot of the cost by keeping their old units and just replacing doors, drawers and worktops etc. One joiner said the base units were still in good condition and of better quality than the ones that might get put in! Their kitchen looks brand new and lovely, at a much lower cost than ripping everything out and starting from scratch. If you have an older home, the original kitchen might be well built, just needs freshened up? Add new appliances, tiling etc, as you find the money for them?

We just rent our house, and the landlord had a new kitchen out in 10 years ago. It looked great for a while but was obviously cheap and it's falling apart again now. The old one was much better, I wish it had been kept now. It might be tempting to want a whole new kitchen but it's not always better, even if you have the funds to do it.