Best finance option for a renovation job

[Mel]

I've just gone sale agreed on my first property - an old 2-bed house.
Sale price is 202K.
Huge renovation job required - dry lining throughout, new windows, install new kitchen, install bathroom from scratch, new stairs being the main jobs. There is mains water, connection to electricity, sewage etc, but will need to connect to Gas for heating.
What is the best way to finance this project? (I will be hoping to spend mainly on materials as i will have family members (and myself!) to do a lot of the labour).

I earn circa 40K, approx 2600/3000 per month in hand, depending on o/time.
Savings of 20K, out of which I will need to pay deposit, fees etc.
SSIA of approx 20K due around April next year.

I am thinking of 92% mortgage of approx. 185/186K now, borrow from credit union against the SSIA / arrange larger overdraft limit for the works, and then do a remortgage on what the property should be worth in renovated state. I would hope it should have a completed value of at least 230K, which is conservative going on current valuations of similar properties in the area.

Any ideas on how best and cheapest to do this would be appreciated, as I am due to speak to the broker again tomorrow.

Thanks in advance.

 

[extopia]

Well the first thing to do is figure out how much it's going to cost to do the renovation. Have you gotten any quotes (not a bad idea to have even if you're going to do it yourself or go direct labour route)?

You need to know how much you're going to spend before you can figure out how much you need to borrow.

A total renovation doesn't cost much if any less than a rebuild, in my experience, although your renovation job doesn't sound too huge. Beware of hidden defects - most renovation jobs get bigger as you uncover more of the structure (mind did anyway )

Best of luck with it.