Need to borrow 25K for house extension

G

Gnosis

Registered User
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Hi there,

What is the best route for borrowing 25K for a home improvement loan? There is 80K left on our mortgage (and 11 years). Our original mortgage has 20k which was never drawn down- we recently went to Ulster bank about same, but as I am currently out of work we were unable to access this. My partner's income is modest enough.

I plan to do the work myself as I now have the time, so we just need the funding.

The original mortgage was for 120k (restoration job), but the house should be worth around 250K, I would think. What would be the best approach to access funding? It seems ludicrous to get a standard loan (even with KBC at 6.3% APR) when we have this asset.
We have savings of about 12k but are reluctant to use this.

Any ideas?
 
Gnosis said:
but as I am currently out of work we were unable to access this. My partner's income is modest enough.
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This is going to be problematic. Even a credit union would have trouble advancing €25k without there being income to pay the money back. If you really need €25k the cheapest and most guaranteed approach would be to get a job and save a little over €2k a month for a year.
 
Ability to repay is the number one criteria for a loan and not the assets so if your income is not sufficient for existing and new borrowings then you will find this difficult.
 
Gnosis said:
Hi there,

What is the best route for borrowing 25K for a home improvement loan? There is 80K left on our mortgage (and 11 years). Our original mortgage has 20k which was never drawn down- we recently went to Ulster bank about same, but as I am currently out of work we were unable to access this. My partner's income is modest enough.

I plan to do the work myself as I now have the time, so we just need the funding.

The original mortgage was for 120k (restoration job), but the house should be worth around 250K, I would think. What would be the best approach to access funding? It seems ludicrous to get a standard loan (even with KBC at 6.3% APR) when we have this asset.
We have savings of about 12k but are reluctant to use this.

Any ideas?
Click to expand...

6.3% would be a very good ( unsecured ) rate for something like that and that amount
 
Bit of a Catch 22- if I get a job I won't be available to do the work on my house. I thought that now would be a good time to begin.
 
Credit Union? Then when you're back working can you draw down the retention on the original mtg and clear the CU loan, although how is there still an active retention available on a mortgage that seems to be a good few years old?
 
That might be the way to go- i.e. take out a CU loan and later clear it with mtg retention funds. We never drew down the full mortgage at the time as we didn't want to overextend ourselves, then the crash came (notwithstanding).
 
Monbretia said:
Credit Union? Then when you're back working can you draw down the retention on the original mtg and clear the CU loan, although how is there still an active retention available on a mortgage that seems to be a good few years old?
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you wont get a credit union loan for 6.3%
 
Sorry, just getting back to you. The above rate 6.5% is from KBC- their early payback (non fee) is restricted to the first 10K. I'll have to study their terms in more detail. The CU is more expensive, but you can payback without penalties, I believe.
 
Gnosis said:
Sorry, just getting back to you. The above rate 6.5% is from KBC- their early payback (non fee) is restricted to the first 10K. I'll have to study their terms in more detail. The CU is more expensive, but you can payback without penalties, I believe.
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6.5% is a low rate , id take it , not like you have a 100 k mortgage in the pipeline

should not cost you more than 28k over five years
 
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