How would you fund this?

[Kangaroobill]

We would like to do work on the house and me and DH have different ideas of how to fund it. We want an interior wall knocked down, beam installed, new kitchen, new downstairs wc, utility, all downstairs plastered and new flooring, new boiler, rendering outside and new drive for 3 cars.

We can realistically save £500-700 per month. DH thinks we should save and do it all step by step by step. I think we should remortgage and do it all at once. We have 45% equity in the house. How do people fund biggish projects like this?

YABU - save and do one thing at a time or wait until you’ve saved enough
YANBU- remortgage

If you can make it work, do it all at once.
I found if I do bit by bit, it eventually goes full circle. By the time you finish the last project, the first thing doesn't look right or styles have changed.

3rd option, get a loan?

set a saving goal for 2/3 years & save intensively. Spend that time planning every detail of the work. Then remortgage to fund the rest & get it done in one go.

I haven't voted because either way can work, but we saved up beforehand and then did it all at once. We just didn't want the risk of spending the money and then one of us losing our job or similar.

I would do it gradually as you have saved the money

I'd remortgage/get a loan and do it all at once, you'll be at it forever doing it in dribs and drabs and it will wreck your head

@Aqua55

3rd option, get a loan?

It’ll be too expensive for all of it, looking around 40k in total.

Don't do it bit by bit, that will be hideous, but save up for a few years.

Sell a car to fund part of it and reduce the need for a drive for 3 cars.

Sound like a lot of work that is interdependent. I’d take out a loan. I’m not sure I would add to the mortgage. It usually costs more as it is so long term. I’d drop some of the unnecessary work. Like the drive and defer the external rendering until you have the money or need to sell. I don’t spend a lot of time looking at the exterior of the house and therefore could live with it.

£40k at £700 per month would take you over 57 month to save. That’s nearly 5 years. Costs may have gone up. It’s generally more expensive to get workmen bacon each job rather than doing it all at once. Given how long it would take to save the money I would say get a loan or add to your mortgage.

We’ve actually been saving up for an extension. I would have been happy to get a loan for it but my partner hates credit and wanted the money in the bank.

It’s taken more then 2 years to save up. A bit frustrating that we could have been enjoying the extension during that period but also means we won’t pay anything for the credit.

Neither of us would have wanted to remortgage given the long term nature of repayments. The longest I would have been comfortable with is a 5 year loan.

*workmen back not bacon

@bridgetreilly

Don't do it bit by bit, that will be hideous, but save up for a few years.

Agree with this. Bit by bit will be never ending with constant disruption and mess. Stressful! Hit it in one go.

I’d save until I’d got enough to do it not do it bit by bit . I wouldn’t remortgage because I’m very risk averse and like to borrow as little as possible .

@LemonTT we don’t actually have 3 cars I was just trying to say it’s a long drive. We do need 2 cars though as we both drive as part of our job.

I didn’t realise a loan would work out like that for that amount, it would be better than remortgaging.

I'd wait until I owned the house outright and then save like mad. In the meantime pay the mortgage as quickly as I could with the extra I would be saving for the extension.

Rather than doing it bit by bit can you divide it into two or three separate projects?

Is one big project or several smaller projects?

If it’s several smaller projects, can you save the required amount, then do that project, then save for the next?

If it’s one big project I would probably put it on the mortgage, then over pay with the £500-700 ‘savings’.

However, in the current climate, I wouldn’t want to add to the mortgage,

Don’t do it bit by bit as it will be more costly in the end. You will find that doing certain bits together will be more cost effective. Ie we are going to replace some windows but it is “cheaper” to get 5 done together rather than getting them one at a time, and building work will be similar.

Ps I would remortgage if I could afford it.

I’d remortgage on the basis that you’re likely increasing the resale price with the work you’re doing.
But I’d only do it if I wasn’t leaving myself in a precarious LTV situation. You say you have 45% equity but obviously that could be £45k or it could be £400k

Could you remortgage over a longer term to spread the cost.Thats a reasonable amount of work for 40k so get quotes first to ensure you're being realistic. Paying vat on this sort of work is a killer.

We have £120k equity

We took equity out. We got one job done then the pandemic started and spent the kitchen money on a car deposit . I’m a bit on the fence of how we did it as we are now back to the equity amount we put in when we bought the house and not much to show for it. If you’re going to be in your house long term then that would be ok.

If remortgage and do it all in one go.