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Debt Consolidation Re-Mortgage

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What is a debt consolidation re-mortgage?

Sometimes in life we over spend! This maybe because of financial circumstances beyond our control or because we needed to complete necessary home improvements, get a new car, holiday or a number of reason!

 

A debt consolidation loan or re-mortgage can be taken out to pay debts such as credit cards and store cards, outstanding payments from catalogues and personal loans. These payments on top of your current mortgage can put you under financial pressure leading to further financial problems or even tempting you to take another short-term fix that will potentially make the situation worst.

 

Taking out a debt consolidation loan or re-mortgage means that you will only have to make one monthly payment rather than several monthly payments to cover your debts. This can make it easier for you to manage your finances and, in theory, makes keeping up with your payments simpler.

 

What are the options? Debt Consolidation re-mortgage, further advance or secured loan?

 

Debt Consolidation Re-Mortgage

This is when you re-mortgage away from your current lender and take a new mortgage with a new lender. This would pay back your current mortgage balance and enable you to raise funds to clear all or some of your most expensive debts. You can debt consolidate up to 90% Loan to Value. Generally we can tailor a budget that suits you and normally this can save you hundreds of pounds per month. We try and get you a better rate on your mortgage and offer a free valuation and free solicitors in transferring your mortgage.

 

Debt Consolidation Further Advance

 

This is when you choose to remain with your current lender. This maybe be the best solution for you because you have a high redemption penalty should you leave your lender at this time. We can help you present a debt consolidation further advance to your current lender. The rate is normally higher than the lenders current products but this is still a great way to reduce your monthly payments. Obliviously like any loan it is subject to credit score and your current circumstances.

 

Debt Consolidation Secured Loan

Sometimes if you can not leave your lender because of redemption penalties or credit issues or criteria issues then a secured loan might be a better solution.

 

Your current lender may have said no to a debt consolidation further advance and your circumstances will not allow you to leave your current lender. A secured loan for debt consolidation is another lender that will take a second charge against your property and act as a second mortgage leaving the first mortgage in place. The rates on these start from 3.5%. This can be a sensible solution to pay off high percentage credit and store cards. With a debt consolidation secured loan the lender are more flexible with minor credit and affordability issues.

 

Other things to consider with a Debt Consolidation Re-Mortgage or Loan

If you decide to consolidate your debt you need to consider the following! At the moment you have debt that is unsecured. If you use a mortgage or secured loan you will be securing this debt against your home. This may reduce your payments but the debt is now secured.

 

You are also potentially extending the term of your debt to help your affordability. For example, you may consolidate your credit card say £10,000 which you are paying £300 per month at a potential interest rate of 20%. This would take you over 4 years to clear this debt. If you converted this into a mortgage with a rate of say 2% this would reduce your payment to just over £200 per month if you kept the same 4 year term. If you extended the term say to 20 years the same £10,000 your month payment would be around £50 per month.

 

By considering a debt consolidation loan you maybe able to stop potential further financial trouble or make life a little bit easier. It is important to maintain your credit history.

 

If you think that a debt consolidation loan is for you then contact us today.

 

We have extensive experience in consolidating debt into a single secured loan, mortgage or further advance. We will find you the best lender and provider that fits your requirements as well as explaining the costs of your debt consolidation loan.
I would like to thank the team at Prosper Home Loans for providing an outstanding service to me and my clients
Mr D Rimell from Hastings

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