£67,031.92 is a frightening number indeed....

enthusiasticsaver · 15 April 2018 at 9:39AM

I personally would use the additional £285 a month once the buildings/plans are sorted to make a bigger dent in your credit card debt rather than save in an extension pot. A relatively small savings pot will be a drop in the ocean in the overall costs and lenders take no account of savings. Reducing your debt by the current £343 plus £285 and delaying the build by 6 months would bring the debt considerably lower.

Beyond having emergency savings to sort your car out I think your priority should be to clear as much of that unsecured debt as possible to get payments down and put you in best position to get further borrowing. You may have been able to up your income too by then as your youngest should be at school if she is now 4.

Treadingonplaymobil · 15 April 2018 at 9:50AM

enthusiasticsaver wrote: »

I personally would use the additional £285 a month once the buildings/plans are sorted to make a bigger dent in your credit card debt rather than save in an extension pot. A relatively small savings pot will be a drop in the ocean in the overall costs and lenders take no account of savings. Reducing your debt by the current £343 plus £285 and delaying the build by 6 months would bring the debt considerably lower.

Beyond having emergency savings to sort your car out I think your priority should be to clear as much of that unsecured debt as possible to get payments down and put you in best position to get further borrowing. You may have been able to up your income too by then as your youngest should be at school if she is now 4.

The £285 is currently going towards plans etc, as you say, but that's interesting re overpaying if there is any lag between getting that done and starting the build. good idea.

youngest already has 4 days of preschool so it will only be one extra day (and each day is around 45 minutes longer, I suppose), and not until October as if they do the same as they did with my older ones, it's weeks and weeks of mornings only, mornings plus lunch, mornings plus half of afternoons, and so on. But it will all help.

enthusiasticsaver · 15 April 2018 at 10:39AM

On scenario 1 where you start the build in January 2019 you will reduce the Barclaycard to £8195 assuming 10 more repayments plus any BT fee in September. The Virgin would be £2528 so total unsecured debt £10723 assuming you pay BT fee separately.

If you use the £285 repayment currently going to extension pot after 3 more months (assuming another £1000 to plans etc) and delay the build until Spring or Summer (better time to build as you won't lose all your heating etc while building going on) then that is an additional £3420 towards the debt and 6 months extra payments of £343 so £2058 plus you won't have to repay your mum until later on in year. That makes your unsecured debt look like £5245 which looks much more affordable. If your lender takes 5% as minimum monthly repayments they will still allow £262 anyway towards debt repayments but presumably you are hoping they take a lower monthly percentage?

Personally I would get builders to quote in stages looking at plans so what would the £20k from your mum give you in say May 2019? Delaying further work until Autumn rather than spring would have brought your debt figures even lower by a further 3 months at £285 plus £343 each month (not allowing for mum repayment) so 1884 making total unsecured debt at that point £3341 by the point you apply for the further borrowing.

Treadingonplaymobil · 15 April 2018 at 12:18PM

Thanks for crunching all the numbers! I had a rough idea but hadn't actually done the maths. Hadn't realised quite how much difference 3 or 6 months could make to the debt if we threw the whole lot at it after architect etc TBH.

I want the build to start at a point where the knocking down of external walls/roof coming off is happening around easter and/or summer holidays in 2019, so we can decamp to a relative, and will be guided by that when it comes to planning a start date. I have been working with easter in mind, but it looks like it would ease things a lot if I changed that to summer, as I guess building would start in late spring rather than late winter.

Suffolk_lass · 15 April 2018 at 1:44PM

The first thing that occurs to me is that you could explore combining both 0% cards into one 0% no fee (according to MSE Barclaycard and Santander both offer this for 27 months - you could check on the main site eligibility checker) which would look better when you come to apply for £25K and also give you just one to clear. Alternative is to ask the Barclaycard people if they will match it ahead of September, and include the Virgin total at the same time (they already have your credit history and you obviously have a significant limit on the account) - be cheeky and ask them to match the no fee (asking costs nothing). If you ask them now, any product jitters (withdrawing offers of 0%, no fees, or reducing term) as a result of the expected interest rate rise in two weeks time would not be an issue.

The second thing is to look at additional borrowing as an alternative option - specifically these are longer term, lower than personal loan interest rates and with your mortgage provider. They are secured lending though. My BS specifically mentions using them for extensions and home improvements. They will take a view on the added value and a holistic view on affordability, and you still have the option to combine them into a single thing when you remortgage.

I also did a quick check of ten year fixed rate 90% LTV options and £230k mortgage on £260k value would be £1017 per month (over 25 years) with Coventry BS (by way of an example). The timing is the thing - your current mortgage fix is only until Jan 20. I don't know what you pay in terms of broker fees and Mortgage application/lender fees but you should spend some time playing with the figures and options - if you remortgage every two years, these additional fees impact on the deal paying for itself (especially when you (I - I speak from bitter experience) casually add these to the mortgage total and discard my hard-won overpayments impact). Here are some other things to consider:

Would your current lender extend additional borrowing to you at a better rate than a personal loan?
Might it be better to start earlier if that is the case?
If you did that, you might be borrowing in early 2019 and be finished building by the time that 2 year fix expires, ready to remortgage for the whole lot by Jan 20
Would that be the time to go for a longer term fix (e.g. ten years)?
What difference would consolidating the CC debt into that "forever" mortgage make to your monthly overheads?
If you were to consolidate, would you be committed to making small overpayments to bring down the mortgage total more quickly (and either reduce payments or term, depending on your choices)?

I know it sounds like I am encouraging you to go for it but I am actually encouraging you to make the options work financially smart for you. I am acutely aware that you have used your business account as an emergency pot in the past and you still don't have a proper one of these at the moment.

I am sure others will have thoughts too

Suffolk_lass · 15 April 2018 at 1:50PM

I agree with ES about paying down the debt on the CC first but aware I sound like a scratched record on this subject so my gargantuan post focussed on other things. You still have lots to think about and time to do so

Treadingonplaymobil · 15 April 2018 at 7:06PM

Suffolk thank you too for your thoughtful ideas.

I am so grateful to all of you for, rather than (fruitlessly) arguing against the extension, helping with ideas to limit costs (no new washing up bowl

) and to do it in the most financial sound and stable way. I really really appreciate the time you're all spending on these ideas.

baglady1 · 16 April 2018 at 12:55AM

Hi TOPM Am in awe of these number crunchers. This is where this forum is so great - lots of really useful and practical advice plus much food for thought. Have no numbers to add unfortunately. Cheers Bl1

Treadingonplaymobil · 16 April 2018 at 7:21AM

Week 62: Day 1

Morning! Back home and lovely to be here - for eight more whole hours before leaving with work for the next three days :eek: .

Experimenting with a two week menu plan, we are going food shopping this morning with a view to buying everything we need from the supermarket to last until a week Friday. The aim is that we'll do a top up fruit and veg shop in town next week. Will be interesting to see whether it helps or hinders the food budget - I'm hoping that we'll just 'make do' as we run out of things so it might save the odd pound here or there, as well as saving half of the time and effort of driving to the supermarket (20 mins each way). Worried I'll get quantities horribly wrong, but it's an experiment.

My dad's birthday lunch was wildly expensive yesterday - heavy drinking relatives and it being easier to just split the bill between the number of people meant I paid about £30 towards booze I did not drink, but luckily I had most of it saved (it was £112 including my share of my dad and step mum's lunches and I had £90 saved already). The extra came from the birthday pot, which is now empty so I hope the DC don't get any party invitations for the next two weeks!

Right, best get on - busy morning ahead!

To do today
1. Food shopping.
2. Bake flapjacks for school snacks.
3. Order new uniform, school shoes etc.
4. Pack for being away with work.
5. Laundry loads on from weekend away.

Debt repayment:
- £29.95/30 April rounding down pot.
- £1,922.49/£5,000 2018 debt repayment goal.

enthusiasticsaver · 16 April 2018 at 8:17AM

Infuriating to have to pay out for alcohol you didn't drink but sometimes there is no way round it without making things awkward.

Good luck on two week food shop. I used to do a monthly shop of meat/groceries/staples and just weekly top ups of fresh stuff when our kids were small. Took a lot of adjusting to but it did get us used to doing without when things ran out until next month and making do with what was in cupboards. Some strange meals though

My DH once made spaghetti bolognese with orange and tomato soup as we had no tinned tomatoes left. Tasted ok.

£67,031.92 is a frightening number indeed....

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