Debt Consolidation Mortgage & Remortgage

This means adding debts such as credit cards and personal loans on to your mortgage with one monthly repayment. With the help of a mortgage advisor, you’ll borrow more on a new mortgage and use the extra to repay these debts.

Often, clients can get stuck between a rock and a hard place making monthly minimum payments on a credit card and not seeing the balance decrease. A remortgage for debt consolidation can help with this.

The amount you can borrow will depend how much equity you have in your property, credit score and your income. Although, a remortgage to consolidate debt is not without its own risks.

Typically, we’ll help you make a list of all your outstanding debts and your current mortgage balance. We’ll then use your income to calculate the amount you can borrow on a new mortgage to see if we can raise enough and if it’s affordable.

Your mortgage advisor will run through all your outstanding debts with you in detail, including the length of time left to run and the current/future interest rate that you’re paying. This information will help our team make their recommendation.

For example, it might be best to leave any lower/zero percent interest arrangements, or those that are almost paid off separately to the new mortgage. Your mortgage advisor will do the calculations and highlight any risks.

It’ll then follow the process of regular remortgage, so you’ll require a valuation, a conveyancer and possibly a survey if requested. Your new mortgage will automatically be repaid on your new completion date.

With most mortgage lenders, you’ll have a lump sum of money left over to repay your credit cards and loans as per our recommendation and there will be a condition on the mortgage offer which states you have committed to do so.

With some specialist ones, the new lender will do this on your behalf.

The main benefits of a debt consolidation remortgage are that clients like the idea of having more disposable income by having just the one monthly mortgage payment.

Also, peace of mind that at the end of the term, the mortgage (including debts) will be fully repaid.

Usually, the new monthly mortgage payment is much less than the combined debts and old existing mortgage.

The risks associated with a debt consolidation remortgage need serious consideration. You’ll be taking unsecured debts in the form of credit cards or loans and securing these against your home, where you live.

Your new mortgage lender holds the first charge as security over home which means in the event of a future repossession they get their monies back before anyone else.

These main risks are paying more interest over the period due to the new mortgage being over a much longer term, and having your home repossessed should you fail to maintain the repayments.

This is different to your unsecured credit where the ownership of your home is not at risk.

Please always seek professional advice from a reputable mortgage advisor when considering a debt consolidation mortgage. Without a mortgage advisor on your side, any mistakes made in this area could be extremely severe and costly.

Your mortgage advisor will carefully consider which debts are best for you to repay and if these are affordable to you.

When considering your application for a remortgage to release equity to repay debts, your income, outgoings, age, credit score, employment type and personal situation will be considered.

If you are concerned about your financial situation, it may be possible to remortgage with bad credit. We’ll be able to look at an up-to-date copy of your credit report to recommend the best way forward.

We work with many mortgage lenders, some more specialist in this area than others.

Nowadays, it’s not unusual for a client to have a blip on their record and want a mortgage with a ccj, low credit score, or a missed payment etc.

Leave this to the mortgage professionals. As part of our remortgage advice service, we’ll do these calculations for you and make an individual recommendation on the best way forward for you.

We’ll need to know the amount you currently owe, the interest rate you are paying and, if it’s a loan, how long there is left to run.

Even if your new mortgage rate is lower than your debts, you’ll be spreading the debts out over more years and you are likely to be paying more interest over the duration of the new mortgage term.

Options such as any overpayments you can make on new current mortgage and selecting a shorter mortgage term can help bring this interest figure down. Your mortgage advisor will run through everything with you to help.

As part of our debt consolidation mortgage service, we’ll find out the amount you currently owe, the interest rate you are paying and, if it’s a loan, how long there is left to run.

Even if your new mortgage rate is lower than your debts, you’ll be spreading the debts out over more years and you are likely to be paying more interest over the duration of the new mortgage term.

Your new mortgage may come with options such as letting you make small overpayments that can help you pay less interest. Your mortgage advisor will run through everything with you to help.

Yes, usually, you’ll be able to consolidate all types of debt including credit cards, store cards, personal loans and any car loans with a remortgage. As mentioned above, speaking to a mortgage broker is important as this might not be the best option.

Often, the new mortgage lender will ask why your debt has built up to an unaffordable amount. Maybe this is due to a separation or divorce, a change in employment type of something else.

The costs of a remortgage for debt consolidation are usually quite reasonable. Often deals such as free legal services and valuations are available from the main high street lenders.

As part of our free, no-obligation mortgage consultation your mortgage advisor will run through all the costs that are involved.

Yes, possibly. Your score could go down initially because you are taking out a new commitment (the mortgage) and paying off others ones so your score could bounce around a bit for a while.

The advantage of using a reputable mortgage broker, like us, that knows criteria inside out, is that we aim to keep the number of searches to an absolute minimum.

In time, providing that your mortgage payments are all on time, your score will become normal. No hard credit searches will be performed without your consent.

We wouldn’t recommend this; we’d advise you to lower your limit and/or close your cards to avoid getting yourself into this situation again. Another debt consolidation mortgage might not be possible in the future.

If you’re unable to make your remortgage payments, it’s important to inform your lender as soon as possible.

Lenders can often provide options to help, such as temporarily reducing payments, extending the mortgage term, or switching to an interest-only plan.

Ignoring the issue can lead to arrears, which may result in legal action or even repossession of your home if the situation isn’t resolved.

Taking early steps to address payment difficulties is key to avoiding further financial complications​.

The time is takes to remortgage for debt consolidation through to completion can vary greatly by lender, however, as a guide, it’s about 2-3 months.

The debt consolidation cases can be more tricky to process depending on how much you are capital raising by.

Our mortgage advice team aim to have secured you a mortgage offer within approximately 2-3 weeks; the rest of the process is in the hands of your conveyancer.

Alternatives such downsizing your property to release funds to repay debts, entering a payment plan with your debt providers, switching to zero interest credit card deals etc should be considered to see if these meet your goals.

If you have explored the above, as part of our service, products such as a further advance from your existing provider or a secured loan/second charge mortgage will be considered by your mortgage advisor as an alternative to a debt consolidation mortgage for you.

How much capital you’ll be able to release will depend on your property value and any outstanding mortgage or loan secured against the property.  Also, your affordability, age and credit score will be considered by the new mortgage lender.

Don’t worry too much about the above as our mortgage advisor team are here to help and guide you through the whole process, including any hurdles we meet along the way.

Yes, a debt consolidation remortgage is also available for our older clients aged 50+. The mortgage world has been brilliant for innovation in this later life lending area over the last few years and a lot of products are now available to help.

Our older clients are generally wanting to remortgage for home improvements, help family, pay off debts, pay for care or to supplement pension income – or a mixture of things.

If you are aged 50 and above and are looking for a remortgage for debt consolidation you can read more about mortgages for over 50’s, including lifetime mortgages and equity release mortgage products.

Our specialist later life mortgage advice team will be able to answer all your questions. You’ll be surprised what mortgage products are now available to older borrowers, even with a poor credit score.

If you are thinking about a remortgage for debt consolidation purposed but you’re in on a fixed-rate deal that has a while run, it is important to explore all of your options with a trusted mortgage advisor.

Your mortgage advisor will consider your current rate and time left with your existing mortgage lender and any early redemption charges payable and compare this to the market.

Your mortgage recommendation will include exploring any options that are available with your existing lender such as a further advance, moving the full mortgage plus the extra for your debts to a new lender, or a second mortgage (often called a secured loan or second charge) on your property.

Yes, you can get a debt consolidation remortgage if you’re self-employed and can prove enough income.

Whether you are a sole trader, a partnership, or a limited company owner, with one year’s accounts you’ll have self-employed mortgage options.

If you are aged 55+, receiving pension income and looking to remortgage to repay debts from your property there will be several options for you to consider.

These options will allow you to take equity from your home using just your pension income, there will be products such as a lifetime mortgage and equity release that do not require any monthly payment from you also.

The interest rolls up with these equity release mortgage types.

Our specialist later life mortgage advice team will be able to answer all your questions. You’ll be surprised what mortgage products are now available to older borrowers, even with a poor credit score.

Your free mortgage consultation will take about 25 minutes and will include basic personal information like name, address, salary, and any existing credit/mortgage details etc.

This information will allow your mortgage advisor to answer all your questions accurately.

If you like what you hear and are happy to proceed with a debt consolidation remortgage us, you’ll need to provide standard documents such as 3 months proof of earnings, ID and 3 months bank statements etc.

It’s normal for other ad-hoc documents may be requested during the application process; this will vary by lender.