What size of a loan for refurbishments?

Just interested in other peoples feedback on this or how they would approach it.
I bought a house in 2019. It's grand, very liveable no roofs caving in or anything serious but has a number of things I want to do with it. I say want rather than need but after 4 years they are starting to drive me mad and I just want the house to look halfway decent at this stage.
New doors and windows-current are at least 15 years old and are thin aluminium and leaking
Back garden is feral and fencing has collapsed on both sides.
Front driveway is full of weeds as the old grass was concreted over and not very well it seems. It actually looks quite delapidated from the front.

Anyway, I've no debt apart from the mortgage currently. I own my car now after finishing a car loan a few months back. I've about 6k in savings. Right now I'm trying to build up my savings before I consider taking another loan out. I figured if I increase the cushion for emergencies etc I might be more comfortable taking out a bigger loan. should I just get a large loan out for a long period or inidividual loans for the various things eg doors and windows 1st etc for shorter periods. I just feel if I do windows first it could be years before getting to the garden and it is startiing to really drive me crazy.

I don't want to overstretch myself with loan repayments. I'll be getting the loan from a CU.
Any feedback appreciated.

What's the question?
If it's how much you could or should borrow (by topping up the mortgage?) then it really needs some figures for the budget for the work that you intend to carry out, details of your outstanding mortgage, value of the property, more details about your overall financial circumstances etc.

You could get equity release for home improvement perhaps.

1) what is the house worth?
2) what is the mortgage?
3) how much do you want to spend?

Without detail it’s how-long-is-a-piece of-string territory and you won’t good advice.

If replacing windows and doors have a look at the seai grants.

For windows & doors to be included you need to be doing a full retrofit, but it may be worth it.
https://www.seai.ie/grants/home-energy-grants/

This would entitle you to a green loan from 4.95% https://www.bonkers.ie/blog/gas-electricity/your-finance-options-for-retrofitting/
Credit union https://cugreenerhomes.ie/

You savings could then be used for the outdoor areas

ClubMan said:

What's the question?
If it's how much you could or should borrow (by topping up the mortgage?) then it really needs some figures for the budget for the work that you intend to carry out, details of your outstanding mortgage, value of the property, more details about your overall financial circumstances etc.

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I'm not looking to top up my mortgage . I bought through rebuilding Ireland so I don't think that's an option . I would be getting a home improvement loan. I have got some quotes so am looking at 20-25k . I@m early 40s , permanent pensionable job. After bills/mortgage/savings each month I have €1300 left. I'm not a spender.

To cover all financial options it would be best if you were to do a Money Makeover to ensure all angles are taken into account.

EvenStevens said:

I have got some quotes so am looking at 20-25k .

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At what interest rate?
If it's a CU loan do you have to keep money in shares/on deposit at the same time?
If so, this increases the effective cost of the loan.
What is the tentative budget for the works that you anticipate carrying out?

Thanks for all the feedback. I will look at doing the money makeover form

ClubMan said:

At what interest rate?
If it's a CU loan do you have to keep money in shares/on deposit at the same time?
If so, this increases the effective cost of the loan.
What is the tentative budget for the works that you anticipate carrying out?

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The interest rate is 6.5% APR. Would have to keep 10% on deposit I think but would need to check that. I can also repay early with no penalties.

EvenStevens said:

The interest rate is 6.5% APR. Would have to keep 10% on deposit

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That would make the effective interest rate c. 7.22% assuming that the money on deposit is earning little or no interest and you ensure that it's always 10% of the outstanding loan balance and not the original principal. I had hoped that the CU had ceased such shenanigans but maybe not?

You might get better value elsewhere. For example... (note that this may not be an exhaustive list):

I really don’t understand all the navel gazing. Keep €2,000 on deposit with the Credit Union, borrow €20,000, use some of your savings as well, and then use your revised monthly surplus to overpay the loan and build your savings back up.

Gordon Gekko said:

I really don’t understand all the navel gazing.

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What exactly are you referring to here?

ClubMan said:

What exactly are you referring to here?

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Someone with no debt aside from a normal mortgage, a decent job, some savings, and a bona fide need to improve their home seeming concerned about a relatively small loan to fulfill that purpose.

Debt isn’t a bad thing. It’s just bad if it’s unsustainable or for frivolous nonsense.

This is just a simple case where the OP should crack on.

Gordon Gekko said:

Someone with no debt aside from a normal mortgage, a decent job, some savings, and a bona fide need to improve their home seeming concerned about a relatively small loan to fulfill that purpose.

Debt isn’t a bad thing. It’s just bad if it’s unsustainable or for frivolous nonsense.

This is just a simple case where the OP should crack on.

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It is a relatively small loan but for me it's potentially reducing monthly left to spend by 3 or 400 euro for a number of years so for me that's not an insignificant amount. The site is called Askaboutmoney which is what I was doing.

EvenStevens said:

It is a relatively small loan but for me it's potentially reducing monthly left to spend by 3 or 400 euro for a number of years so for me that's not an insignificant amount. The site is called Askaboutmoney which is what I was doing.

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It’s a small loan for you as well, but the most important point is that you need it, so the decision is an easy one. You’re generating a surplus of €1,300 a month which is a decent amount. You should feel comfortable just cracking on and taking out the loan.

Also, remember your credit card, if you have one and it’s clear, forms part of your emergency fund.

You need to strike a balance between having an emergency fund and not incurring interest on a loan while you have cash on deposit.

People come here asking about car loans and finance for things they don’t need and can barely afford. My point was that you are looking at a loan for something you need and that you can quite easily afford. You should just crack on and do it.

Gordon Gekko said:

I’m not sure what your problem is.

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No problem other than what you were referring to by "navel gazing" was far from obvious, so I simply asked what you meant.

ClubMan said:

No problem other than what you were referring to by "navel gazing" was far from obvious, so I simply asked what you meant.

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The OP dwelling for too long on the ‘should I?’ aspect of the loan.

@EvenStevens , you have EUR1200 left over every month, right?
Maybe you don't need a loan at all.

Try breaking out your renovation project into sub projects & prioritise them by criticality & by dependency on other sub project (intelligent sequencing) then do them 1 by 1 with your monthly excess & cash savings. I think that's the aproach I'd take in your situation.

You've got cash in hand & you're quite liquid month to month.

ClubMan said:

That would make the effective interest rate c. 7.22% assuming that the money on deposit is earning little or no interest and you ensure that it's always 10% of the outstanding loan balance and not the original principal. I had hoped that the CU had ceased such shenanigans but maybe not?

You might get better value elsewhere. For example... (note that this may not be an exhaustive list):

Best Home Improvement Loans in Ireland | Home Loan Calculator

A home improvement loan can help add value to your home. Use our home improvement loan calculator to compare rates for the amount and term you need.

switcher.ie

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You're right on that. My CU confirmed today that rules have changed and only €5 has to be kept on deposit so that's a plus. Thanks again for the links etc.

Horatio said:

@EvenStevens , you have EUR1200 left over every month, right?
Maybe you don't need a loan at all.

Try breaking out your renovation project into sub projects & prioritise them by criticality & by dependency on other sub project (intelligent sequencing) then do them 1 by 1 with your monthly excess & cash savings. I think that's the aproach I'd take in your situation.

You've got cash in hand & you're quite liquid month to month.

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The windows alone will cost more than the OP has in cash.

And good luck getting any tradesperson doing work on the drip, waiting for the OP to earn the money to pay for the work.

I agree with @Gordon Gekko on this, get the loan for as long a term as you can get to reduce the obligated monthly repayments. Then overpay to reduce the loan term.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

How much were the car loan repayments and were you always able to maintain a rainy day fund while paying them? When do you think you might want to change the car?

Most people who describe themselves as savers who can comfortably put aside €1,300 per month would have more than €6k in savings, so just make sure you are reviewing you full spending before committing.