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Original poster

If you needed to borrow about £5,000 - £7,000 (for home improvements), what would you do?

17 replies

bibbitybobbityhat · 17/08/2011 13:32

Bank loan
Credit card
Mortgage extension

???

My head is already hurting and we are having trouble making a decision (we are terribly cautious and indecisive) and I'm going a little bit mad with thinking about it.

Any thoughts? tia.

OP posts:
Original poster
bibbitybobbityhat · 17/08/2011 14:08

Look, I know its not sexy or intriguing or scandalous ... perhaps I should have put this in aibu Wink ... but please please squeazy cheese, any ideas?

OP posts:
PandaG · 17/08/2011 14:14

extend mortgage, think it is the cheapest means of borrowing.

NeedaMAP · 17/08/2011 14:16

Not credit card, definitely. If you can get a mortgage extension do that, it's usually the lowest interest rate available and the terms will be longer. Banks are usually happy to lend on that basis if it adds value to the house.

Original poster
bibbitybobbityhat · 17/08/2011 14:19

Should add that we would be able to pay that amount off within a year.

Okay, have answered my own question: not a mortgage extension Grin.

OP posts:
Earlybird · 17/08/2011 14:20

Definitely not credit card - interest rates are exorbitant.

How long would it take you to save up that amount of money, and could the repairs wait until then?

I always prefer to pay cash, if there is any way possible. Failing that, mortgage extension is probably the best option.

Original poster
bibbitybobbityhat · 17/08/2011 14:24

Thanks Early (and everyone else).

We have already saved up quite a lot more than that amount and I really am getting depressed with the state of our tatty house. We have lived here 7 years and I am 50 next year and really can't stand the thought of living in semi-squalor much. This £5,000 is the last little bit needed for new carpets, some replastering and stuff. We have already saved enough for a new kitchen. I have a long and sad posting history about the state of my house Sad.

OP posts:
Gonzo33 · 17/08/2011 18:38

Cheapest borrowing will be extending the mortgage and then paying a lump sum off next year. If you don't want to do that a Personal Loan would be a good option, but you'll be looking a much higher representative rate.

ShoutyBag · 17/08/2011 18:49

We had a meeting with mortgage adviser. To get 17k it would cost us £100 a month based on our house being a certain value.

HarrietJones · 17/08/2011 19:05

Extend mortgage if you can over pay to pay back without penalty.

CogitoErgoSometimes · 17/08/2011 23:13

If you can pay the full amount inside a year & you can pay for the work to be done with a credit card (do plasterers take plastic?) I'd probably go for one of the 0% cards and be very sure to pay off the balance before the 0% expired.

Beamur · 17/08/2011 23:18

Credit card could be expensive, unless you can get a good deal and pay it off in a year.
Mortgage extention - depends on what kind of mortgage you have, any arrangement fees, penalties for early repayment etc.
Loans - shop around and see what you get, I got a reasonable deal with a loan from my usual bank but that's not always the case.

stripeybump · 17/08/2011 23:21

I second Cogito's suggestion - if you're sure you can pay it off within a year, see if you can get a 0% credit card.

You could try posting or searching on the moneysavingexpert forums, they will find this stuff sexy and salivating Smile

Original poster
bibbitybobbityhat · 20/08/2011 11:03

Just coming back to say thanks for the replies.

We are going to get a 0% credit card - I'm amazed at how many are still available, for up to 18 months, in this supposedly credit crunched day and age. That and an interest free kitchen from Ikea means we can definitely start in a month or so Smile - v excited.

OP posts:
pickgo · 21/08/2011 11:00

Have you thought of diy the kitchen? If you can follow instructions, have time, and about £200 in tools, it is really quite easy.

I've done 5 kitchens for various family/friends so far

Tsil · 21/08/2011 11:13

Just a thought, Zopa loans are good, they let you over pay the monthly payments so you can pay it off early with no penalty.

0% on a CC is usually on a balance transfer from another CC so you would need 2 CC with the right credit limit. Also if you are late with a payment then the 0% stops immediately so be wary of that.

careergirl · 21/08/2011 20:28

for home improvements I tend to take out an unsecured personal loan. Unless its for anything really major say above the £7k mark when it becomes cheaper to borrow by way of mortgage extension.

ellerman · 30/08/2011 16:33

Have you considered your local community or employer-run credit union. Rates are good, and you can pay it off in a lump sum if money becomes available with no penalty for overpayment. I use this to buy cars and fund large household projects. Your local council may know of where your local one is.

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