Where do you get the money for things like extensions/new kitchens?

[Banania]

Sorry this is really nosy & a bit clueless. Just wondering how people generally fund big jobs on their house like extensions, kitchen overhauls etc. We bought a house a couple of years ago, it's totally fine for now, but long term will need some (a lot) of work done. But it seems like costs will run so high - so it will take us years and years to save for. Is that pretty normal, or do you look into other financing options?

[Imaginingdragonsagain]

I imagine most extensions are funded through remortgage? For our new kitchen we paid through savings

[drspouse]

Savings or remortgage. We have a current account mortgage at the moment so paid for our very expensive double glazing (wood frames) by upping the amount we borrowed temporarily.

[Banania]

Thanks for the reply imaginingdragonsagain. I was wondering about remortgaging alright, whether most people do it this way.

[PonderLand]

I always wonder this too.
We bought our house after a surprise pregnancy so we didn't have time to save, we'll be getting a 5 year loan to do the kitchen and garden once our credit ratings are a bit better. Then selling and hopefully we'll find a house that house a nice kitchen and garden! I couldn't face getting another loan for another kitchen.

[JoJoSM2]

We earn quite a lot and save up. Our mortgages have always been relatively low (1-2years worth of gross income) so that we can afford work.

[southall]

Most people will use savings or a loan.
Or perhaps inheritance or redundancy money.

Some dodgy people will even resort to Insurance Fraud to get a new kitchen. Dont recommend that for obvious reasons.

[EssentialHummus]

A loan or equity release.

[southall]

I also remember back in the early 2000s.

Mortgage firms would offer 100% mortgage + another 30K personal loan at mortgage rate for a new kitchen and bathroom, carpets and furniture etc. 30K went a bit further back then. Those were crazy times.

[Kiroro]

Savings
Bonuses (live of salary, use bonus for one off projects)
Unsecured personal loans
0% credit cards
Mortgage extension
Inheritance

[Stokey]

We were thinking of cashing in ISAs but think we're going to add more to the mortgage for now. Borrowing is very cheap at present and we are lucky in that our house price has gone up a lot since we bought it. We can borrow more & still have the same repayments as our LTV is lower & so are interest rates.

But we won't lock in to a more than two-year mortgage as not sure what is going to happen.

[namechangedtoday15]

Remortgage - paid down mortgage for 5 years, house value increased by about a third in that time, so we remortgaged to take out some of the equity.

[Gamtanner]

I couldn't get a remortgage (just gone self employed) so I funded my new kitchen (approx £10k) by putting it on an interest free credit card.

That was 14 months ago and it will be paid off before the interest free period ends in 2018.

[wowfudge]

We didn't use all the equity from selling our last house as a deposit on the new one, so the surplus was our new kitchen fund. In practice new kitchen fund has been stretched to cover some other things so I have some savings we're using too. We were thinking of remortgaging once the kitchen was finished, but we have got a really good rate on a bank loan which was easier to get and will be paid off in five years. We need to fund redoing the bathroom too and realised things were getting too tight, but we didn't want to compromise as we plan to be here for a long time.

[HeadDreamer]

I'd assume extensions are via remortgaging as it's a really large amount? We did our kitchens from savings.

[warmleatherette]

I'm so glad other people borrow to fund these things too! I thought everyone was just doing tons better than me financially.

[wowfudge]

Our kitchen costs have doubled as we decided to do some other stuff which will make a big difference. Plus I may have underestimated that I have quite expensive tastes in kitchen units and all the other things that bump the cost up, like a huge range cooker!

[Banania]

Remortgage - paid down mortgage for 5 years, house value increased by about a third in that time, so we remortgaged to take out some of the equity.

namechanged - that's interesting, so can I ask (you don't need to go into too much detail!) what has been the overall effect on your monthly repayments? I'm just wondering if we'll end up doing something like this.

[Banania]

Ha yes me too warmleatherette

[dilapidated]

We are in the process of fully renovating our 2 bed Victorian house.

We saved up £10k, were giving an additional £5k as a gift from family, and borrowed £10k home improvement loan through our bank.

In future (next 5 or so years) we want to do a loft extention and that will likley be funded by remortgage as we wont be able to save as severely as we had before as we have a baby on the way.

[Kiroro]

what has been the overall effect on your monthly repayments?

How long is a piece of string. You can't infer what will happen to your own repayments based on someone else!

Depends on LTV, mortgage term, amount released, change in interest rates, any fixing etc

[semanwen]

0% credit card cash advance with 2% cash advance fees over 24 months. Pay it off over the 2 years. Cheaper than any bank loan or mortgage.

[Katz]

We've saved £15k and then bought the kitchen from Ikea and put that on credit over 36months.

[themanonthecycle]

Can anyone tells me how equity release is done? Is the repayment any different to remortgaging? Is there an advantage of one over another?

[JumpingJellybeanz]

We remortgaged once we'd paid off a substantial amount of the original loan. Our repayments stayed the same but we'll be paying it off for 10 years longer.

[Liz79]

We have remortgaged for our extension & topping up with 0% credit cards, which we will move around & pay off without paying interest on. We use the cards for as much shopping/spending as possible. When the bill arrives, we transfer from our wages at least the amount we have spent that month. It transfers into a special interest paying current account for the extension. We are thus being paid a little interest on the credit card loan. Although the main reason for this was to quickly raise cash as I doubt the workmen will take cards, they'll want a cheque.