How do people finance home improvements/extensions?

[Yorky]

Not intended to be a personal question but apart from getting a home improvement loan from the bank, remortgaging, possibly equity release (if anyone can explain this to me in layman's terms I would b v grateful, or buying for example a kitchen on the store's buy now pay in x time scheme or selling a small child, how do we find a large lump of cash to finance the home improvements we want to do?

Have I missed anything?

TIA

[careergirl]

the only way I fund major work is by using some of the equity i.e. am planning on using £10k equity to redo the kitchen and some external works i.e. new driveway.

[upahill]

We just saved up and had a large kitchen extension and re fit.
We have been saving up all year and have enough for a new roof and attic conversion which starts next week.

In the new year we save again for a refit in the hall.

i won't put anything on the mortgage or take any loans out. The kitchen cost about £20,000 and the roof and attic will be the same.
It was hard work but worth it.

[mousesma]

I save up for any home improvements but I realise that I'm fortunate to earn enough money where if I make sacrifices there will be money left over for saving. If you are already right to the wire with finances this probably won't help.

I'm currently saving up for a new bathroom which I've been after for the last 2 years but haven't got enough money yet to do.

[Fizzylemonade]

Same here, saved like a demon. We moved to a much bigger house so our disposable income halved (and by disposable I mean after all the bills had been paid.) It was tough but we saved to move house and keep our mortgage as low as possible so it wasn't like we were spending like mad anyway.

Last year we saved up £12k for a double garage conversion. As I am a SAHM and I do the bulk of the shopping so I was really hard on myself. I wanted a new winter coat, but I didn't need one I was just bored of the one I had, so I didn't buy one. That saved me £80.

It was hard, I only bought clothes for the children as they did need them, but we slashed our bills. Stopped buying anything we didn't need.

We are still saving, hey ho. For a kitchen extension which will change our lives. My eldest son is 8 and when we said let's just get on a plane and have a lovely holiday he said "will we be using the kitchen savings?" which we would be, and he said "no, I'd rather have the kitchen, I miss cooking and rolling out pastry in the kitchen." It broke our hearts so saving saving saving.

[BleughCowWonders]

re-mortgaged.

[Whorulestheroost]

We are mortgaged up to the hilt and have very little disposable in come but have not had to do anything major expensive eg extending. However we seem to spend hundreds each month on something for the house. Just this morning I have spent £250 on wood as we are lowering the kitchen ceiling. Its constant and I'm not sure the house will ever be finished! Save save save that's all I can say :)

[CherylWillBounceBack]

I find it fascinating that the option that wasn't listed was to save up for it. Says everything about the world in the last ten years!

[Yorky]

What a depressing read.

We currently have a 3 (2double and 1 single) bed semi and DC4 due early next year so more space is moving up the priorities quickly! There is no way we could save even half of £12k in a year - it looks like a loan and being stung for the interest is the only way :( - at least the bank sounded positive when we asked and didn't laugh in our faces.
I just have to concentrate on getting a job in about 3yrs time so that we can pay off the loan faster

[Pascha]

We chose to move to a house way under market value due to work necessary, and mortgage up to the expected value on completion, giving us enough money to do the majority of the work. I don't know what we would do if we just wanted to raise the funds now. Remortgage I suppose.

[RandomMess]

We saved up to, went without holidays, new clothing, treats etc lived frugally I guess.

In the last 10 years we used savings to pay for a downstairs cloak room (£2k), loft room £15k), getting married (£2k), car (£7k), kitchen and downstairs (£18k)

Don't have a huge income but always saved the child maintenance I recieve for my eldest as was never sure I was going to get it! We also kept is as an overpayment against our mortgage whilst we were saving up.

[Mandy21]

Of course, the best / cheapest way is to save but given the cost of home improvements and the amount that most (sorry - sweeping statement) people have left over at the end of the month, it would generally take years to save the amount thats required. We're planning a large extension in a while - estimate is around £60k - and there is absolutely no way we can save that kind of money - if we have £200 left over at the end of the month, we've done well!!

However, we have quite a lot of equity in the house, and our income level will go up when we stop paying nursery fees for DC3 so we'll be in a position to re-mortgage and afford the additional repayments.

We know we can afford it so although we're going down the dreaded route of increasing our indebtedness, its not the end of the world as most people on here have suggested!

[RandomMess]

If you're going to take on more debt I would always recommend saving the proposed monthly repayments for at least 6 months so that you really do know if you can afford the repayments.

[singersgirl]

"Save it" is only useful advice for relatively small amounts though. If it worked in all circumstances, we wouldn't need to have mortgages at all. Everyone would just save enough to buy a house.

We've financed various small to medium building and renovation projects out of income and savings in the past - our loft extension, a new bathroom, a small downstairs cloakroom. It would have taken us a long time to save enough to finance the larger extension/kitchen/flooring we've just had done (conservative estimate £70k) but we were able to remortgage quickly.

[mumblechum1]

We save it/sell shares. A few years ago we sold £50k worth of shares and did the garden, tarted up the kitchen up a bit and redecorated & bought some furniture.

I'd never get into debt for home improvements tbh.

[Yorky]

Mandy - you sound so like us, its quite a relief!
We're looking at an extension of a similar price, and will also be able to afford gold plated toothbrushes when not paying nursery fees! We know we can afford the extra loan as we won't take it on until this time next year when we finish paying off a current loan so the repayment won't change our outgoings, just change the size of the house hopefully.

[RandomMess]

Sounds very doable then Yorky. Larger loans attract lower interest rates. I think you can probably start shopping around for a complete remortgage or home loan or mortgage advance about 4 months before you need the money?

[gigglepin]

We save up, sometimes for 2-3 years for what we need.

Our new kitchen was from Ikea on an interst free repayment plan that we knew we could afford each month. Over 2 years and we put down a hefty deposit, from savings.

The last big thing we did was a conservatory and a loft conversion. We did this by changing our mortgage from an endownment to a repayment, chopped in the endownment and topped up the mortgage. Luckily for us we have a tiny mortgage as we bought 11 years ago when house prices were low.

[GrendelsMum]

It might be worth going over to MoneySavingExpert forums and seeing how much you can save on your current expenditure. The Mortgage Free Wannabee is very helpful.

I'm afraid we're paying for everything with savings, too. It does work out considerably cheaper!

[Civliz]

We have done a combination of saving and remortgaged - our renovation cost us nearly £300k - no way could we wait long enough to save that! We've scrimped for a couple of years to save a large whack and it's miserable....we missed our holidays, new clothes, eating out and we just had enough. Saving will be more measured from now on. We have a good income to pay the mortgage, save modestly and enjoy life - balance is important.

We all have different attitudes to debt and risk, remortgaging to update your property is not always an irresponsible thing to do. Assess your finances honestly and work out what you can afford. I know people who scrimp and save for 10 years to achieve a mortgage free life good for them but for dh and I those 10 years would be like a prison sentence - we'd rather spread the pain and live a little for today, save a little for tomorrow. Everything in moderation.

[CurlyhairedAssassin]

Could a kind soul explain very simply how you go about releasing some equity to do big home improvements? Didn't even know this was a possibility, for our extension I had only thought about adding to our mortgage.

[RandomMess]

well it's the same sort of thing under a different name.

[bibbitybobbitybloodyaxe]

We have to save up because dh is self employed and it is impossible to add to our mortgage even though we can comfortably afford our repayments plus some. Tis why we live in chaos! Just about to do our kitchen after 7 years in this house.

[Yorky]

Thank you Cat64, that was nice and simple and in English - the closest I have got to going 'Hey, now I get it!'