Personal Loan, Home Loan

We have some funds in redraw we can put towards the renovations. The new mortgage paperwork arrived today, and I’ve thought about it in detail after seeing the final figures and having some questions raised.

I contacted our Loans rep from RAMS tonight with some questions, particularly around the refinancing figures, and suggesting a Personal Loan would probably see us better off. He has a commission to make according to the documents, so I’m keen to see what he’ll do to make the logic work, but have also thought that he might not be able to do much – he did a fair bit to try and make the figures work, and we are ‘approved’ for this, but a Personal Loan, we’d pay more interest, but save thousands in refinancing fees.

Alone, we’d lose the LVR fee we paid to CBA – $2500. Then we’d pay another to RAMS – $3500, valuation fees, lose the flexibility that we do have with CBA at the moment, and end up paying more interest over the life of the loan due to the amount and duration.

I realised I wasn’t comparing like for like, we got him to assess $40 000, but since this will put us at a significant disadvantaged position, and the granny flat was later revealed to not be council approved, we’ll do those later / ourselves. The house is what matters, so we’ve asked the builder to change from PVC to Weathertex, submit a house only quote, and we’ll go with this.

I’m hopeful of a quote less than $25000, as we are aware we can get a James Hardie product on the outside, unpainted, the bathroom stripped and lined, the laundry redone in new, new ceilings in both, for just over $20000. Considering he suggested Weathertex would be cheaper than PVC cladding, and the extent of his would be less, I’m hopeful of a smaller quote.

Assuming the financing falls into place, however we go, probably Personal Loan now (yes, I’m indecisive, it’s a failure of the research), the work is still 6 weeks off starting, and the builder advised his busy. The solar panel group are due to contact in 2 weeks.. I’d say that’s getting rescheduled for sure.

A Home Loan would be $25000 in interest over the life of the loan, a Personal Loan would amount to $7000 in interest – it seems sensible in that respect, despite the higher interest rate. We’d do as we did with the mortgage, aggressively attack it until it’s gone, Relax a little on the mortgage, then revert to attacking it.

The interior will be on hold indefinitely unfortunately. It’d be a better world if money was no object.

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