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

We'd be looking to borrow over 10yrs. By my maths we should be able to borrow £25k, as we can reduce CC payments down to minimums. It's still going to be tight though, for the 'best case' design. We're waiting to see what the architect says to our more specific. budget restrictions next week (we have set different limits on different sizes of extension, as the smallest option might not make the house work for us for the long term, so it needs to be cheaper so we can save to further improve or move).

Sea_Shell wrote: »

Thanks for the info.

When planning the fixtures and fittings for the extension (especially kitchens and bathrooms) do you think you'll be able to reign in your "have the best" tendencies...and instead go for the nice, but practical (and cheaper) approach. The decisions made there can make £000's difference to your final costs. We know how you love your design etc. We only have to remember "Washing-up-bowl-gate"!!!:rotfl: - But we also know you've made HUGE changes since then.:beer:

I think I'll have to! At least that stage will come at the end when the budget will be just down to 'whatever is left', so it's not going to be about anything more than working with the money that's there. We all know I'm going to struggle with the reality of that though. :cool:

Current debts

I do have the numbers...

Unsecured
Parental loan £20,000 (no min, no interest, no current repayments)
Barclaycard £11,345.77 (0% until Sept '18, anticipating being able to shift to another 0% at that stage as won't have borrowed for extension yet, minimum payment £260 last month, paying £285 per month at statement time, with around a £30 overpayment every month since Jan, so £315)
Virgin £2,808.71 (0% until Sept '20 or thereabouts, min payment £28, only making minimum but will keep it at £28 as min reduces).

Secured
Mortgage £193,009.83 (2.99%-ish, 2 year fixed, expires Jan '20, £708.67 per month, this is approx 85% LTV).

My current thought process is that we will continue to pay as much as possible for now, while saving for ongoing costs such as structural engineer, architect, planning, building regs, then our ideal plan is:
- Get a tighter price estimate from the architect over the coming week, and proceed if the numbers make some sort of sense.
- New 0% in Sept '18 for barclaycard balance.
- By Jan '19 have CC debt reduced so that minimum repayments are closer to £200pm total.
- Borrow £20,000 from my mother in early '19 when building work commences. Small interest/debt repayment, £50-100pm.
- Borrow large personal loan (c.£25,000) in spring '19 to continue to cover costs.
- Finish shell work and as much interior as possible by Sept '19
- Remortgage in January '20 to incorporate as much of this new debt as possible, as the house value will have increased due to the improvements.
- Borrow another £10k if necessary in '20 to finish off any work not yet done (possibly kitchen, we may have a temporary one bodged from old units for a year to keep initial costs down while we repay more debt)
- Prioritise remaining debts in interest-rate order, including some repayment for old parental loan, even if it's tiny.
- Never borrow ever ever ever again, stay in that house for the rest of time.

enthusiasticsaver wrote: »

I don't think you should be going into further borrowing thinking a DMP will be your get out of jail card.A DMP won't take account of any repayments for family debt so if your mum lends you £20k and you already have £20k family debt that is £40k which cannot be sorted with a DMP. Are you willing to default on a loan from your mum when she has said she needs you to make repayments? If you are going to take out a large unsecured loan then defaulting on that may mean that they will go for a second charge on your property. At the present time though I think you may fail the affordability checks for this anyway.

A DMP will also affect your mortgage so as your mortgage is now quite high this will mean significant increases if you no longer qualify for good interest rate deals.

My advice would be to continue to save as much as possible and repay the credit cards down by a bit more than minimums. Upping your income significantly though and paying off your credit cards is realistically the only way I can see you affording this extension.

All of this is at the back of my mind too. A DMP has never been part of my plan and would be an absolute last resort, at the 'if the alternative was losing the house' level of last resort, rather than 'we might not be able to afford avocados every week' level, if you know what I mean.

I am really truly hoping that we make enough of a dent in the CC debt/save enough in the extension pot this year that it seems less horrific to do this extra borrowing, as I can see how incredibly tight the numbers are and how close to total meltdown the whole thing brings us.

Actually writing all this down has been a really good exercise, as I can see how much difference we can continue to make by paying off every extra penny we can.