Financing home improvements

[MargeryDaw]

Hoping this is the right place for this. By way of background, DH bought our first home almost two years ago. We bought with a 10% deposit and have been on a two year fixed rate deal.

We're now at the stage of needing to arrange a new mortgage. We have also been considering some home improvements, nothing major just changing a window to French doors, changing flooring downstairs and building a small porch. I had assumed we'd be able to borrow extra on the mortgage to finance it but today our current provider told us we wouldn't be able to add to our mortgage, or get a better rate than we're on.

We're middle earners with good credit ratings so I'm really confused. Was I naive to think it was that easy? How do others afford it? We don't have savings and with a small family can't understand how we would manage to save the £8k ish we'd need any time soon.

We also have had a second child since moving, of the opposite sex to DC1. So fine for now for them to share but at some point we'll need to either extend or move to a three - bed. If we can't even borrow £8k on the mortgage at the moment how are we ever going to manage either of those options?!

Sorry this is long, and forgive me if I'm just being horribly dense about this.

We don't have savings and with a small family can't understand how we would manage to save the £8k ish we'd need any time soon.

There's your answer.

You can't afford to borrow any more money so a lender would be irresponsible in lending to you.

New rules were introduced in April last year which tightened up mortgage lending criteria and it's all about affordability now.

Having another dependant since that time will have reduced your affordability too.

Many people couldn't get the mortgage they got 2 years ago if they applied today even if their circumstances haven't changed.

You might be able to get an unsecured loan as the checks are less tight but that doesn't make it a good idea- if you can't currently save very much, you'd likely struggle with the repayments.

Your only option is likely to be earn more or spend less and try and save- unfortunately (or fortunately depending on your point of view) banks don't chuck money at people any more.

I know what you're saying, and I can see we have to make some savings. We don't live an extravagant life at all though: one uk holiday a year (usually just a week), second hand 11 year old car, no memberships, clothes from charity shops/eBay only when needed...I just don't understand how so many people apparently earning similar to us and living similar lifestyles are financing home improvements - and I know so many that are. I guess it must be savings/loans/credit cards.

I need to accept that we're going to need to make do with what we've got (and be grateful for it). And try to save what we can

I guess it must be savings/loans/credit cards.

probably

As above - unless you've been overpaying, you'll still only have around 10% equity (plus whatever house prices have risen by) so it would be irresponsible to lend you more.

You will just have to survive with no porch.
If the floor is okish you survive as above. If it is very bad do what we did go to BQ buy cheap flooring, watch utube tutorials and then put the flooring down on weekend.
Why do you want to be in debt?

Of course we can survive without a porch! I was thinking slightly longer term re the children having to share and possibly financing an extension at some point. I don't want to be in (more) debt, otherwise I'd just pay for improvements with a bank loan or credit card. I have just been naive I realise now about adding a tiny bit onto the mortgage - less than the equity, getting a good rate and paying only a little more per month, to get those few jobs done.

Thanks for the tip re flooring, I'll have a look.

That's tough, but as others have said its a case of not being able to afford it . I say this as someone who is crawling out of debt. Looking at the 'finish' line is great.

It wasn't worth it!

For me; Any holiday, home improvement will feel so much better if its paid for.

Don't ever feel like keeping up with others. Everyone has their own situations. There was a thread here yesterday about personal debt. Appearances aren't everything.

Depends. We just remortgaged (same provider, 15 year history with them). We cut 2.5 years off the term and borrowed 6k more for the same monthly payment (much smaller interest rate). But we have nearly 50% equity.

Start putting a little aside every month now and save for it. Can you find 75 quid a week in your budget to save instead? 2 years later, you'll have your 8k.

Or break it up and save towards one job at a time. Which is the one you would most like? Save for that, get it done, revel in it, then save for the next project.

Our master bath desperately needs replacing but we don't have 25k for it, and couldn't take out an equity loan, so we live with it, hollywood lights, 'brass' finish and all.

I'm surprised you couldn't get another mortgage deal. We also bought two years ago with a fixed rate deal, have had another child since securing the mortgage and I changed online with our current mortgage lender to another fixed rate deal with lower interest rate so we've saved money. We've used that saving to help finance a (separate) loan for a new car, we couldn't have afforded the loan repayments before taking the new fixed rate mortgage. So very similar to you.

Have you tried your current lender direct? You should also look at loans indpendent of your mortgage provider, the rates are very low ATM.

You don't have to stay with your current provider. We used London & Country mortgage brokers to find us a better deal when our deal came to an end.

have you tried speaking to a mortage broker? try London & Country - we recently remortgaged, although ours was a 3 yr fixed rate and we had 20% equity and have borrowed extra.

we increased our mortgage by 16k, monthly payments have stayed the same

it's not the best way to finance improvements, but when your chimney is collapsing and the kitchen is in a dangerous and unusable state, sometimes needs must

£75 a week is a lot, you make it sound easy HerRoyal!

But l agree with pp it's best if the bank think you cant afford it to not borrow it. Sorry.

Sorry, you've already said you were rejected by your current lender shouldn't post and bath kids at the same time I agree with trying an independent mortgage advisor.

Depends on income though doesn't it, and outgoings?

I never seem to have the spare to put towards home reno's, I find it much easier to pay stuff off. We have the spare in the budget, but it's easy to fritter it away. But I will have to get saving if I want the bathroom done.

We break it down as others have said.
Do one thing at once, set a goal of saving for a year, however much you can put aside then get one project done.

That's how we do it, we may as well pay our wages directly to b&q and local builders merchant's for the first 5 years of living in this house.

I would guess the equity is the biggest problem. We are just getting our first mortgage and plan on doing similar in 2 yrs. The mortgage co. only allow extra borrowing up to 85% ltv so if your not at 80%ltv or lower you wouldn't really be able to borrow more.

Also as above kids really knock your borrowing potential. One company took 30K off our borrowing limit because we have 2 children.

Long term your best bet is to pay down your mortgage to a lower ltv so you can borrow more in the future.

Thanks for all the replies (only just logged back on today). The idea had been to get a lower rate to allow for the extra, as some PP have suggested. We've got appointments next week with other mortgage companies to see what they say. We don't really want to be paying much more per month than we do now so it was more about balancing out, as far as possible, saving with a lower rate but paying the same to borrow iyswim. I have no intention of getting into a situation where we can't make our repayments! I'm risk averse when it comes to money.

That's interesting that providers will lend less if you have more children. I had no idea but I guess it makes sense.

We'll see what the other mortgage providers say but I think it will be a case of breaking jobs down, doing what we can ourselves and saving saving saving!

Thanks for all the replies