Brendan Hughes

I've a few projects for the house - new kitchen, loft conversion, etc - which might cost, say, 10k each.

My mortgage is 25% of my salary, my salary is guaranteed a few more years. Normally I could save a few k in a year, but recently we don't seem to be managing that - a holiday here, a gadget there, and the savings just don't go up

But if I know I'm going to live here another, say, 5 yrs minimum, it seems a bit frustrating to wait for 4 and then have the improvement, when I could borrow the money somehow and benefit from it now.

I know a few of you do major home improvements - how do you fund them? Do you save up the appropriate amount, or do you extend the mortgage, or get a personal loan, or what? (If you get a nice Christmas bonus, lucky you - no chance of that happening for me.)

Cheers

MattW

General rule for me is if it enhances the home value wise I'm happy to mortgage it, if not then save for it.

ronjeramy

iTrader: (1)

down size the car?

Suresh

Brendan, we added all our home improvements to the mortgage. The interest payable is tax-deductible here and leads to a net interest rate of under 2% It should be noted that for valuation / remortgage purposes, the value added is typically computed as only 50% of the amount borrowed and spent. The maths of this only makes sense if house prices [continue to] rise in your region during your planned holding period.

We spent lots of Euros on rebuilding work (2nd/3rd floor remodelling + 2 bathrooms and a also lots on a new kitchen (almost 100k in total)), so don't expect to get much done with 'just' a couple of 10ks.

HTH

fast bloke

Depends on what you want to do - kitchen and loft conversion will add value to your house, but not as much as you will spend. What you need to consider is what value it will add to your life. Say you are planning to stay 5 years and the kitchen costs 10k. You will recoup 5k when you sell the house, so you need to decide if it is worth the other 5k to have a nice kitchen for 5 years.... If it is,then borrow it at the cheapest rate possible (usually mortgage) - If you have a few quid spare, you can pay off this portion of your mortgage over a shorter term than the rest of it. If you decide you want it but you want to save for it, you will need to save 300 quid a month for three years so than you can have a nice kitchen for two years.

(p.s. - my personal and professional opinions are not necessarily the same - can't give professional advice without doing a full fact find and 'knowing my client' but personally I tend to borrow as much as is possible to spend on stuff that will have value during the life of the borrowing - I've yet to read an epitapth (sp?) that says "I wish I had saved more"

MattW

Amen to that.

LG John

I remortgaged to fund mines and also to buy out a small share that my parents had in my flat (they helped me to get it in the first place). The flat had gone up in value over the first few years I had it making it possible to get a reasonable amount of money out of it

bobsabuilder

Its your home, you're going to be living there fo another 5 years yes?
So get the work done ASAP and finance it by adding it onto the mortgage.

For the next 5years you then get to live in a nicer house

Whether it adds all the value to the house as it cost to do doesn't matter, but it most probably WILL make it easier to sell at whatever the asking price is compared to the house without the work being done.
But I think over 5 years, you WILL reap the rewards financially.

Bob

PS I think if you're budgeting 10k per project then thats plenty. IMO you could get it done for half that depending on the size of your house.

Brendan Hughes

Thanks everyone - looks like remortgage is the answer. (Downsizing the car not realistic).

All I need now is to find a builder I can trust - so I'll be back on here in about 5 years asking which kitchen units you suggest.

J4CKO

iTrader: (1)

We are in a similar situation, however we don't have a mortgage to extend, so the choice is to use what saving we have to do stuff or make do and mend, got a quote from Magnet for a new kitchen as the existing ten year old one is dropping to bits, 11 grand and they didnt include what we told them to so sod it, going to fix the broken hinges, knackered fridge and get the doors sprayed.

Everyone assumes that they need to replace everything these days (me included) but if you think about it, a bit of fettling might get you through the next five years ?

j4ckos mate

we save up, from time to time we borrow on the mortgage fro time to time as well.

but when we use the mortgage its always for the urgent repairs like the roof etc and we never extend the term of the mortgate just the amount

skoobidude

Had an extension last year. Sold my scoob to get some money. Bought a Xantia diesel for £600. Didn't service it, just ran it to the ground.
Carried out extension last summer. Started saving for new car straight after - easy when you're not speding loads running a performance car! Xantia died in November so decided to cycle to work and carry on saving.
Last month bought 350Z, job done.

Brendan Hughes

The annoying thing is, the kitchen is less than 12 yrs old and looks extremely impressive, the units are in perfect nick, we have stone work surfaces (I don't know if marble or granite or whatever...). But when you live with it every day, and my wife is really getting into cooking, it's not ergonomically designed at all. The fridge is right next to the oven (and I mean right next to - 4mm), the crappy little 4-hob is in a corner and I constantly smash my head on the rather nasty extractor hood, it has no wok ring though we wok about 3-4 times a week, there is a "pantry" thing at the end with shelves all the wrong width and length for storage optimisation, the hot water tank is at the other end of the kitchen taking space in the pantry rather than directly under the boiler which currently houses a cupboard where we have to dig for things, etc etc.

The loft conversion I can live without, though the thought of one massive home cinema room and balcony with hot-tub that looks out over the valley and the sea is rather appealing. Another project is to take down a wall in the basement to open up two small dank rooms into one decent large one, but I've a horrible feeling it will need an RSJ in its place, so it's not just 30 mins with a sledgehammer and then a pack of polyfilla.

Toerag

We had a similar thing with our house, the kitchen looked fine when we bought it, but within a year we realised that a hob in the corner and sink behind the back door when it was open and no cooker hood was ridiculous! So we completely gutted the room, rewired it with enough sockets and light switches (developer built 'to a price' house), replaced the ceiling, relocated the sink position, fitted a magnet kitchen, rangemaster electric/gas mahoosive cooker, biggest sink we could buy, plumbed in an extractor, underfloor heating, dishwasher, fitted fridgefreezer, granite worktops, & telescopic shower-type tap. Much happier now!!!
Wok burner - test cookers you like the look of as our wok ring doesn't work as well as the biggest normal ring, the flames don't really reach up the side of the wok. Oh, and it's a real pain to clean, if I'd had the money and permission from the missus I'd have got an induction hob, my mate's just put one in and reckons it's brilliant, although he's had to get a whole new set of pots&pans.
All our below worktop units have big drawers apart from a corner carousel - the drawers are brilliant as you can get to the back easily.
The telescopic shower-type tap is ace, makes washing big pots/woks etc. a doddle. you just have to make sure whatever's underneath the sink doesn't foul the hose as you pull it out and put it back.

Brendan Hughes

Thanks mate. Very nice tip about the drawers.

Well aware of the difficulties of hob cleaning, I've been looking at various hobs for two years or more and all have the right ingredients but none have the right combination, so I haven't rushed to buy one. Another tip; controls at the front look good and seem logical but means there will be less space between pans! As for induction, I asked that on here two years ago, started a bit of an argument, not sure I really got a conclusive answer. But we do get power cuts once a month or so, so not sure I'd like to go exclusively in that direction.

Deep Singh

Nonsense. It depends on the value of a house. If the house is worth £1million then even a £50k kitchen will recoup its value, it will sell the house.

Deep Singh

Are you having a laugh? £5k for a loft extension? Where do you live? Bulgaria?

Deep Singh

Are you having a laugh? £5k for a loft extension? Where do you live? Bulgaria?

fast bloke

OK - I'll give you that one - However, if you live in a £1 million house, you are unlikely to be asking a bunch of petrol heads if you should borrow 10k for a new kitchen? - Also, a 50k kitchen will not add 50k to the value of the house, unless you are lucky enough to find someone who has always dreamed of owning the exact kitchen you have chosen - Most people would prefer to pay 50k less and spec their own kitchen (see worktops thread in DIY if you don't believe me )

Brendan Hughes

Guys, please don't get hung up on the figures - remember I don't live in UK and I never said the overall value of my house...

Toerag

Apparently the induction hob is brutally fast at heating up things if you have it on full power, like boiling water faster than a kettle!! It also stays cold, useful if you have kids/pets that wonder round the worktops.

Deep Singh

Sorry mate I still don't agree. By the same measure then they would like to save £15k and fit their own bathrooms, save £10k for own decoration, save £15k for own floors etc. That means they will have to do a full refurb and take it from me after having just done it, most people would rather not.

Thing is you need to fit the right things of the right style and then your £10k kitchen will add £10k to the value.

HowieG

We build loads of loft conversions - min28k +Vat, normally 34k +vat for a three bed semi. Given the cost of housing/ moving etc. generally the house value goes up by at least the amount spent. So your money is invested, not lost.

But! It has to be done properly. Any old diy job just won't do. Don't think you'll knock one up in a few week ends either!

In answer to the original question - borrow some of the money and earn the rest. Do over time, weekend work, private jobs etc. A larger mortgage will hang around for ages - try not to make it too big on you own home, it does'nt earn you anything you can spend!

Best of luck

Howard

Deep Singh

So you can't do me one for £5k then?