Can anyone help me come to terms with this financial 'mistake'

[LaurieFairyCake]

I had a thread last week when I just found out that our extension was costing twice as much as we thought it was.

It left us 2 options:

1. Take a loan out to finish it

1. Wait a long time to finish it (like years) - the negatives of that being that all the walls/groundwork were done so we would have a massive eyesore and not have the room that we needed

We have taken a horrible loan out - it's at 25% - the poor rate is due to the fact that we took a much smaller loan out a month ago - we thought that was all we needed a and would never need to borrow more.

I literally want to rewind time and not start it at all - we never would have done it at all at this price and we wouldn't have had the eyesore.

The only chink of hope is that we hope that we can remortgage and pay off the really expensive loan is a year as it will add value to the house.

We talked every option out exhaustively but I'm left feeling really anxious about it and struggling to come to terms with it.

Is there anything anyone can say to me to help me feel better

you poor thing, what a horrible situation

i'm not sure what i can say other than that in a positive sense you have made your decision about how you want to proceed (horrible loan), and you have a longer-term plan about how you want it to pan out (remortgage). you can't rewind now, so try not to waste energy thinking about that

in years to come this will all be over, all resolved one way or another, and it will pass and you will think about it less and less, and it will have been worth it in many ways

the difficulty is getting through these months in between when you're not sure whether the gamble will pay off, and you don't have control over all the factors. that's very stressful. things will be easier with time, in that you won't be thinking about it quite so frequently, but i think you may well still have take-your-breath-away panicky moments. is there anywhere you can go when that happens, either physically or mentally? just to distance yourself from the situation, think about other things unrelated to the situation, reminding yourself that this is not forever, mistakes happen and you're doing your best to resolve it?

sorry, i'm not sure that this is terribly helpful

You'll end up with a lovely, bigger house that has a higher market value? In the meantime, whatever spare cash you can scrape together, use it to pay off the expensive loan. Are you worried that you can't afford the total repayments?

Thank you Willie

Cogito - we can afford the repayments but there's not much wiggle room or holidays in what's left - and we haven't been abroad for 10 years anyway. I think that's one of the reasons it's so hard - we were hoping to go on holiday/life could be a bit easier for the next ten years as the last ten haven't exactly been a party.

Instead it feels like we've given away the next ten

Relax.

the difference between the horrible loan and a nice loan is one year of interest at 25% instead of 5% on- what- £12k? which is £2,400. Annoying, but you might have spent that on a holiday and not been traumatised.

Long-term, your house will go up in value. You are investing in it.

Get some chocolate and be nice to yourself. the builder will presuambly feel guilty enough to do a bloody good job with no cost over-runs. That could have saved you £2,400 in itself.

Added to which when we moved in 3 months ago our mortgage was worth 212, house was worth 253.

Now with all the 'improvements' the mortgage and loans are 261, meaning that the house has to be 'worth' 300 plus for us not to have lost actual equity in the house.

How much is the horrible loan? Could you put any of the horrible loan onto an interest free credit card and work at paying it off quickly?

Is there any possibility of going interest only on the mortgage, and saving up the reduction in payments till you can pay the builder?

You'd have to do the sums carefully to check this was actually saving you money, but 25% is .

when I did work on my house, my original budget was £47 k
I ended up spending £130 k
and do not regret it for an instant as I have the house I want

assuming your work will make you have the house you want its still cheaper than moving and you can re evaluate all the loans in a couple of years

get the work done and have the home you want
holidays and cars can wait