When you feel that your family have simply outgrown the space you are in, the first thing that comes to most people's minds is to move house but when you weigh up the cost of upsizing, it's easy to see why so many homeowners decide to extend their homes and stay where they are.
We used Rightmove's Moving Cost Calculator, and found that buying an average priced house in St Albans for £494,777 would cost £14,739 in stamp duty, £2,474 in legal fees, and £2,474 in other costs – a total of £19,687!
If you were to put a similar amount of money towards improving your current home, you would see your living space increase and see your property increase in value - very much worth the investment. Adding a bathroom and a bedroom through an extension or loft conversion could increase your property's value by more than 20%, according to Nationwide - which would make the value of the St Albans home just under £594,000. Thats a £100,000 increase for approximately £20,000 spend!
The personal loan choice (avoid mortgaging and protect your house)
A price war and a plethora of new personal loan providers means that this is probably the best time to take out a personal loan. Each personal loan provider trying harder to top their competitors means that you can benefit from a personal loan with a fantastic rate.
There are three main advantages from getting a personal loan. Firstly, there shouldn't be any set-up or application fees. Secondly, you do not have to go through a new mortgage-based affordability interview, so if your credit score and finances are in good shape you should get accepted. However, even if your credit score is not tip top many providers will still accept you amidst this price war.
Thirdly, personal loans are ‘unsecured’, so your property is not going to be at risk if you fall behind with your repayments. Rates on smaller loans, between £5,000 and £7,500, will probably cost about 5 per cent fixed over five years. Medium-sized loans up to £15,000 are cheaper, with rates starting at around 4.1 per cent, again fixed. Borrow more than £15,000 and you will pay about 5 per cent.