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Original poster

what's the best way to get £20k?

23 replies

thisisyesterday · 18/03/2010 21:12

we want to extend our house a bit, and we've had a quote and it's going to be around £20k

we spoke to the mortgage lender who said that they will give us £8k but at a higher interest rate than the mortgage (presumably it would be a homeowner loan rather than added to the mortgage itself)

they'll only give us £8k because they won't ever lend over 85% of the value of the house. we suspected this would be the case after asking advice on here prevously!!!

so, how can we do this? should we try and get a loan for £20k from someone else? accept the £8k and get the rest on another loan/credit card?

we can afford the repayments on a loan of £20k spread over 10 or 15 years, but i'm also feeling quite wary of it all now!
are we being crazy to want to borrow more money in our situaiton?

it would cost us a LOT more than £20k to move to a bigger house btw

OP posts:

mitfordsisters · 18/03/2010 21:33

It's probably going to enhance the value of your house, as well as making your day-to-day life more enjoyable? It makes sense to do it (provided the builders do a decent job!).

Borrow at the lowest rates you can, even if it means getting 2 different loans (look on moneysupermarket.com for most competitive deals). If the idea of borrowing for 10 or 15 years makes you twitch, you could set up an ISA and direct debit some money to it every month (£25/ 50), then pay off the loan early. Check the terms of the loan first to check there are no penalities for paying it off early.

Original poster

thisisyesterday · 18/03/2010 21:38

i don't think we're going to be able to actually :-(

just looked on moneysupermarket and all the loans say that you need to make sure that the amount of the loan plus the outstanding amount on the mortgage doesn't exceed 80% of the value of the house, which this will

hmmmm
back to the drawing board.

stupidly we can get £20k on a credit card. but i don't know many builders who take credit cards! lol

OP posts:

CarGirl · 18/03/2010 21:43

Can you start over paying on your mortgage to build up some savings that way and then in a couple of years borrow the money?

tenista · 19/03/2010 13:54

If it's hard to borrow at a reasonable interest rate, it means you're probably at the upper end of acceptable indebtedness.

Can the extension wait?

Remember, this is the age of austerity.

Original poster

thisisyesterday · 19/03/2010 19:12

cargirl, strangely that thought came to me earlier in the loo! lol it's def something we could do and then possibly leave the extension until next year

basically we have a 3 bed house, 3 children. smallest bedroom is currently being used as an office and storage. I would really, really love to free it up and be able to use it as a bedroom again.

we can't go into the attic as there is not enough headroom, so we want to extend out the back and create a utility room and office out there.
atm we have a brick-built shed in the garden which our tumble dryer is in and i'm sick of having to go outside to use it! so the idea was to just basically join it onto the house

it could wait, but you know what it's like when you're just so, so, so, so sick of something and you want it to change now!

anyway, will def look into overpaying. we deliberately chose a mortgage we could overpay, but never have yet despite being in a position to.
also will look into how we could maybe still extend but reduce costs. ie, make it smaller

OP posts:

Eddas · 19/03/2010 19:27

Could the office be moved from the 3rd bedroom for a while, until you can get the money? We have our 'office' in what was the airing cupboard. We changed our boiler to a combi so the tanks have been removed from the airing cupboard and loft and we had an empty cupboard just doing nothing. Then could the other things being stored in the bedroom be moved elsewhere/sold/charity shopped/freecycled? do you really NEED it? Then maybe if you can make do, but a bit more comfortably then you can wait a year or 2 to extend.

ToccataAndFudge · 19/03/2010 19:29

rob a bank ????

expatinscotland · 19/03/2010 19:33

'basically we have a 3 bed house, 3 children. smallest bedroom is currently being used as an office and storage. I would really, really love to free it up and be able to use it as a bedroom again.'

my ex boyfriend had an office in the garden. it was actually a garden shed. he had it insulated, wired, and his WiFi covered it.

it cost him about £7000.

that's a lot of money to borrow in this economy, tbh. i can't think of any lender who'd loan the £12000 you want over that long a period of time.

Original poster

thisisyesterday · 19/03/2010 19:37

no, we literally have no other spare space.

the room DOES need a good clear out though, and that is part of my plan for the weekend!

atm we have 2 boys sharing the biggest room, and baby in with us in the middle sized room. we can just fit a double bed, cot and 2 chests of drawers so no space there

downstairs we just have kitchen and a lounge/diner and a small hallway.

but something has got to give, and if we can't afford it then we'll find a way round it! hmmmm

Toccata... will you help me??

OP posts:

Eddas · 19/03/2010 19:45

is the 3rd bedroom big enough for a cot and office? Literally just the cot, store all other clothes/toys for the baby elsewhere, then get rid of everything else in the room.

If you want to properly sort a room, and if you a hoarder like me, I suggest getting someone you trust round to help you sort through as they won't be sentimentally attached to anything. My best friend has done this for me before. We are total opposites, I hoard and she keeps nothing! I kept sneaking things out of the sacks she was merrily filling up

Eddas · 19/03/2010 19:46

oh and before we moved to our current house(3 bed) we had the computer in our bedroom. Would it be better if you move the baby out of your room and had the office where the cot was?

expatinscotland · 19/03/2010 19:48

IKEA might have some solutions, too, on how to maximise space without incurring so much debt.

BariatricObama · 19/03/2010 19:48

you would need to be prepared for 5k contingency as well.

foxinsocks · 19/03/2010 19:53

i feel like throttling banks at the moment. We also need to spend some money on the house and imvho, banks are taking the piss especially since a few of them are being propped up by us!

I mean the interbank lending rate is something like 0.6% but you will be lucky to find much under 10%. We were also told we could just take it out on overdraft or credit card but I would not do that for you unless you are confident you could pay it off quickly (or are money savvy and can move it around on credit cards).

I have been researching Zopa

zopa

and Sainsburys bank

sainsburys bank

both of which have good rates at the mo (but mainly for up to £15k so if you could fund that £5k elsewhere, it might work out to be the cheapest option)

preggersplayspop · 19/03/2010 20:00

I would look at using the space you have in the best way. If you don't work from home do you really need a whole room devoted to an office? I work from home from time to time but use a laptop which I store under a sofa when its not in use and all my filing is kept in a cupboard. I am constantly looking for things to chuck out of my house to create more space.

If you can't extend in the attic there is probably still bags of space for storage so can you move some of the stuff out of the office room into there.

Also, do you need to use the tumble dryer so much? I've never had one so have never really 'got' them, I dry clothes on a maiden (but only have 2 children and one is a baby, so probably have less washing I guess).

I would be really wary of taking out loans rather than extending the mortgage as the rate you would pay would be so much higher, especially on credit cards I would imagine. If it was me I would want to extend the mortgage or, more likely, save up and use cash.

A garden room is a great idea though to create more room at a lower cost, I would love one if I had the space in our garden.

expatinscotland · 19/03/2010 20:06

something like

this for example.

BariatricObama · 19/03/2010 20:10

expat's suggestion of an outside office is a good one. my friends have a gorgeous outside office

expatinscotland · 19/03/2010 20:16

my ex, too, ran a business that was his entire livelihood out of that office.

Original poster

thisisyesterday · 19/03/2010 20:26

dp sometimes works from home, his job is computer related. computers and technology are his only real passion, and he saved up for a long time to build this pc, which is it must be said, on the large size!

i don't begrudge him it, it's his hobby and he does a lot of stuff on it that he wouldn't be able to do on a laptop.

i'd be happy with a laptop downstairs on the table! but it ain't ever gonna happen lol,

sadly the garden isn't big enough for an outside sheddy office thing. we really just need to join the existing shed onto the house, but it's a bit old and would have to be knocked down and rebuilt, hence the cost

and yes i do need my dryer! i've only just got it lol
3 children, eldest is 5, smaller 2 both in cloth nappies! the ceiling airer and 2 clothes horses just weren't cutting it sadly

but i am going to talk to dp and see what exactly the builder had quoted for and perhaps if we can alter it and lower it a bit.
we can make do as we are for a while I guess, I just wanted it now now now! lol

OP posts:

preggersplayspop · 19/03/2010 20:29

I sometimes chuck out things belonging to my husband if I know he hasn't used it for a long while. I can be ruthless! I guess your dp may notice if you get rid of the pc though

Original poster

thisisyesterday · 19/03/2010 20:34

yes, i do sometimes chuck his stuff out! i have to admit i am the worst hoarder though.

it is my mission for the weekend now though i have decided. to get the room cleared out. half the stuff in it is waiting to go on ebay anyway

OP posts:

Eddas · 19/03/2010 20:40

free listing this weekend on ebay, according to an email I just opened. I ought to get listing. I still have baby bits cluttering the place and no plans for more dc, and ds is 3 weeks away from 3

Have a serious think about moving the computer into your room though. We had ours on some kind of workstation in our old house and it was fine. Ok not exactly romatic bedroom decor but it worked

I know the feeling about wanting it now. we have plans for our kitchen/diner including french doors and knocking down and re-building the shoddy utility room but it will cost LOTS and we don't have any money I have managed to persuade dh to consider getting the money as extra mortgage when we get to the end of our fixed mortgage in 2 years, so that's my target to save a bit and re-mortgage for the rest. 2 years seems way off though!

spilttheteaagain · 19/03/2010 20:40

Toccata that was my first thought on seeing the thread title!

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