Urgent Advice please

[mins]

I have bought a PPOR house and moved into it recently. Since moving in we have found that there are a few issues which although not strikingly urgent do require urgent attention. I am getting a little stressed out because the list keeps growing.

I have exhausted the majority of my funds to purchase the house. We have done some painting, change light fittings and door handles etc so far which hasn't cost much. Anyway, what I would like advice on is I was thinking of getting a personal loan (which I have been approved for) to complete some of the more pressing and expensive things which need doing to the house. I will also consolidate a couple of credit cards which are currently at 28% interest.

The personal loan is $30,000 and the rate is 17% which is a LOT higher than I estimated. Due to some issues obtaining the home loan I am thinking this could have something to do with the higher rate. Anyway.... the bank says I can revalue the property in 3 months. If I borrow the money to complete the renovation over the next 2 months, I feel the property should increase by at least $30,000. But like everything, there is no guarantee. If it doesn't then at least most of our stuff is in one loan instead of 3 or 4 small credit cards and we will pay off the personal loan asap.

Would you borrow at 17% if worst case scenario you could have it paid off in 2 years and even if property value doesn't increase, you home is now how you want it and my drainage issues along with the other pressing issues are taken care of?

 

[Perchy]

No.

How pressing? Will it affect your health if you leave it for down the track? You sound like you're already stretched to the limit.

 

[chilliblue]

Go get a part time job or find ways of bringing in additional monies and spend the money as you earn it. Personally I would not be stretching my finances.

 

[The Y-man]

Hard to advise without knowing what needs fixing....

The Y-man

 

[mins]

Drainage and pooling of water issues which could affect garage and foundations. Guttering issues which could cause further backflow of water into the house and some roofing issues which need to be rectified to stop water leaking into the ceiling with electrical wiring etc.

 

[mins]

and I am earning approx $150k per year with my husband working casually as well. Paying it off isn't an issue it is just it would take approx 12 months to save enough to rectify these issues and with the type of issues they are it could end being a lot more costly.

 

[Rockstar]

Can you change to interest only for a while to reduce repayments? I wouldn't worry about water pooling in the short term. It's probably been pooling for some time. Send some photos if you can? Have you had a couple of plumbers check out the house? Get some professional advice before worrying too much.

Can you borrow some short term money from family to see you through?
Can you cut down on living expenses?
What LVR is your loan and what are your monthly repayments?

 

[Aaron_C]

Yes change to Interest-only ASAP.

 

[Peter_Tersteeg]

For my own home, assuming my finances were correctly set up, I wouldn't be borrowing money for a series of renovations. I'd simply prioratise and save the money for the things that needed doing.

 

[Macca]

I would be also changing the loan to IO for 12 months, I would then be placing myself and husband on an extremely tight budget to get the PL paid ASAP.

With that sort of income, a year should be heaps and then you can relax a bit.

 

[Pa1nter]

I wouldn't be borrowing money either after just purchasing the house.

If it is a water issue,just temp it up and put up with it until you can afford to do an item properly one at the time.

Surely at 150K a year you have some spare money each week

What you are proposing to do in this economy is suicide,

That's my opinion with the information given ,it is nothing personal

 

[BAJ]

Dear Mins,

Think CALM.......it sounds like you just love the house & don't intend to move out in the short term.

First fix only the ESSENTIAL STUFF ...those things needed for comfort in the house, any electrical or water issues. Don't be distracted by starting any big projects.

Secondly, ask your Credit card provider to lower their interest rate with a BASIC CREDIT CARD with no Fly Buys or bonus points which you do pay for with the higher interest rates.

Consolidate and simplify your life and finances.

Learn to use cash again and the KISS principle.

Live in the house for at least a year. Let the rooms take on their natural usage to your lifestyle eg using a bedroom as a bedroom, or as a study, or as a store room.

Give yourself some breathing space. Don't rush in foolishly.

Maintain the house....learn to garden and add value with simple garden improvements.

Over time quietly consider what parts of the house work and what parts don't.

Keep us posted on how things are going.

 

[kathryn d]

Unless the issues were urgent, no I wouldn't borrow at 17%.

Maybe cut down on any "wants" for the near future, create a budget,and it shouldn't take too long to save..with that income.

 

[Tillie]

If you earn $150k + your parterns' part time earnings, how can you have credit card debt

If this really is the case you should consolidate credit cards to personal loan and the most importantly cut up your credit cards. There also might be even cheaper than 17% interest rates in some other 'no thrills' credit cards. But if you go with that option you should still cut up the credit card and just pay off the balance.

 

[BMan]

sounds like you should try doing a balance transfer on your credit cards and try to pay them off
most balance transfers have really low rates for 6 months to a year

 

[The Y-man]

We have done some painting, change light fittings and door handles etc so far which hasn't cost much.

Would be the last thing I do in a PPOR - unless they were safety hazards - you know that it is a universal law that freshly painted walls gather the most marks?

The Y-man

 

[shuggy]

Drainage and pooling of water issues which could affect garage and foundations. Guttering issues which could cause further backflow of water into the house and some roofing issues which need to be rectified to stop water leaking into the ceiling with electrical wiring etc.

If you can't handle a few credit cards then a $30k loan spells disaster.. think of it as a big credit card with similar interest rates. If your partner works casual then maybe get him to spend a few days on google and youtube so can fix the problems himself for $3-4k.

1. Drainage and pooling of water = find where the water is coming from then dig a ditch in front (20cm wide x 60-90cm deep) and put down aggregate and aggie pipe. Or use an angle grinder, cut some heavy slots in 100mm PVC pipe. Direct it to a pit.
2. Guttering issues = simple gravity.. grab a few brackets at Bunnys and raise the gutter where it's falling or grab a few new sections and replace where required.
3. Roofing = get up there and have a look where the water is staining the ceilings. Probably just needs some weather tape stuck on any obvious gaps, cracks.

 

[laurieload]

Guttering issues which could cause further backflow of water into the house and some roofing issues which need to be rectified to stop water leaking into the ceiling with electrical wiring etc.

Just get some gutter tape, sandpaper, black waterproof sealant and silicone and spend a day cleaning and patching the leaking bits of the gutter and downpipe. And add extra brackets if necessary to get the flow right. Will last at least a year.