Debt Consolidation Remortgage

Consolidating unsecured credit into your mortgage is not a step to be taken lightly. You should speak to a mortgage advisor and consider all your options before making a final decision. 

Is Consolidating Debt a Bad thing? 

You will normally pay back more overall by rolling unsecured credit into your mortgage. That said, your monthly payments will normally be lower and for some people that is their main priority.

You are also taking securing debt against your home. If you do not keep up payments on a mortgage then your home will be repossessed. This is very different to missing payments on loans or credit cards. 

Why do people run up large credit card bills? 

Over the years, obtaining credit has sometimes been too easy. It’s quicker for people to borrow money than save up. Sometimes people have invested in home improvements though which may have increased the value of their property.

It’s hard to make inroads into paying back historic debt if it is accumulating interest. Not everyone qualifies for zero percent credit card transfers. 

What are the other options? 

Before consolidating credit you should do a budget planner to analyse where you are spending your money each month. There may be some luxuries you can do without such as gym memberships, takeaways and expensive coffees. Maybe a personal loan to consolidate your credit cards could be an answer.

At least a loan has a set end date unlike credit cards and since a personal loan is typically taken out over a shorter term than a mortgage then you may pay back less interest. 

Maybe it’s worth speaking with a family member who may be able to help. It can be embarrassing for some people to speak with their parents about bailing them out but often if a family can help then they will. 

If all these avenues have been exhausted then a debt consolidation mortgage might be right for you. It certainly is one way of reducing your monthly payments if you are struggling to save.

Many people use remortgage to release equity from their homes. You are allowed to raise capital for many different reasons to raise funds to gift to your children, perhaps to get them onto the property ladder themselves.

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