Debt Consolidation Mortgage & Remortgage

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We'd always recommend speaking to a qualified mortgage advisor before you remortgage for debt consolidation.

If you’ve been a homeowner for a while now, you’ll most likely have a fair amount of equity in your home.  If you are considering a debt consolidation mortgage, generally, the more equity you have the better.

Typically, a debt consolidation mortgage is when any outstanding credit card or personal loan balances etc are repaid and added on to your mortgage.

It’s not without risk though, we’ll help you consider the pros and cons of a remortgage for debt consolidation and recommend the best way forward.

If you’re an older borrower, we have a dedicated later life team to help, read more about your options with mortgages for over 50s.

You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.

Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.

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Speaking to a reputable mortgage advisor is important!

Seeking great mortgage advice when researching a remortgage for debt consolidation is vital.

As trusted mortgage advisors, it’s part of our service to ensure that you fully understand how a remortgage for debt consolidation works and the risks involved.

A remortgage for debt consolidation will increase your overall mortgage balance secured against your property.  You’ll need to think carefully before you proceed with a debt consolidation mortgage application.

As, if you fail to maintain your mortgage payments, your home could be repossessed by your mortgage lender.

We have access to 1,000s of debt consolidation mortgage deals and we’ll find you the most suitable one based on your individual circumstances. It’s a free, no-obligation mortgage consultation.

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How to remortgage for debt consolidation.

Firstly, please book a free, no-obligation consultation to discuss your remortgage for debt consolidation options. Your mortgage advisor will help you get together a list of any credit cards or loans and establish which ones you’re wanting and what’s best to repay.

Your mortgage advisor will then run through all your options, highlight the risks, and let you know how much your new monthly repayments will be if you decide to proceed.

As part of our mortgage advice service, we’ll help you through the whole journey. Helping you with any potential hurdles that you could face along the way including surveys, down valuations, conveyancing etc.

Your conversation with our mortgage advisor team will take about 25 minutes, this can be either on the phone or face-to-face via video call.

If you’re looking for a debt consolidation mortgage in the next few months and you’d like to know more, you can book this online now via the button below.   As mentioned above, this is a specialist area of lending so please always seek great mortgage advice.

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Learn More About Remortgages for Debt Consolidation

Remortgage for Debt Consolidation FAQs

What is a debt consolidation mortgage?

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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.

How does debt consolidation through remortgaging work?

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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.

What are the benefits of a debt consolidation mortgage?

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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.

Are there any risks associated with debt consolidation through remortgaging?

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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.

Will I qualify for a remortgage to repay debts with bad credit?

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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.

How do I calculate the savings or costs of debt consolidation through remortgaging?

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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.

What are the interest rates for remortgaging and how do they compare to my existing debts?

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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.

Can I consolidate all types of debt, including credit cards, personal loans, and car loans?

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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.

What are the fees and costs associated with remortgaging for debt consolidation?

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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.

Will remortgaging to consolidate debts affect my credit score?

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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.

Can I continue to use my credit cards and accumulate new debt after consolidating?

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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.

What happens if I can't make my remortgage payments?

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Customers may be worried about the consequences of defaulting on their remortgage and whether they risk losing their home.

How long does a debt consolidation remortgage take to go through?

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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.

What alternatives are there to debt consolidation through remortgaging?

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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.

What is the current value of my home?

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If you are considering a remortgage for debt consolidation, a good place to start is by having a good idea of your properties value.  Looking at both for sale and sold prices in your area for similar sized homes will help.

A mortgage valuation will be carried out by your new lender as part of the application, quite often this is on a “drive-past” or automated basis rather than a physical inspection of your home.

What is my current mortgage balance? 

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Something else to consider when thinking about a debt consolidation remortgage is the balance of your existing mortgage or loan secured against your property.  Our mortgage advisor team will help you with this if you are unsure.

Usually, the longer that you have had your mortgage the more capital you will have repaid. Hopefully, your property will have increased since you purchased it also.

How much equity can I release to consolidate debts? 

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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.

I’m aged over 50, can I still get a remortgage for debt consolidation?

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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.

Can you still remortgage to repay debts if you’re locked into a fixed rate deal?

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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.

Can I get a debt consolidation mortgage if I’m self-employed?

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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.

Can I remortgage to repay debts when I receive pension income?

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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.

What documentation and information will I need to provide during the debt consolidation mortgage application process?

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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.

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Converse with your own dedicated case manager.

Your case manager will be by your side through the whole remortgage for debt consolidation process.

We're here for you, every step of the way!

Any questions regarding your remortgage for debt consolidation or the process that you have along the way, we will be more than happy to answer them.

Your mortgage isn't the only priority, insurance is important too.

We like to make sure every customer who get in touch are covered with the right inurance policy tailored to their circumstances, to make sure they are protecting themselves and the people they love.

1000s of remortgage products.

In order to try and find the best remortgage deal for you, we will search through various high street and specialist lenders.

We have 20+ years of experience dealing with remortgage situations.

We have insider knowledge of lending criteria and debt consolidation remortgage products.

Your advisor will be with your every step of the way to try and help you remortgage, even with bad credit.

It's not just about the mortgage, we want you to receive the best mortgage remortgage advice and customer service possible to let you remortgage with bad credit.

Main Reasons to Remortgage for Debt Consolidation

Remortgage to Repay Credit Cards

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Often, clients feel stuck between a rock and a hard place paying the minimum payment on various high interest credit cards and not seeing the balance come down.

This can prove to be frustrating and feel like you’re stuck in a hole.

Maybe they’ve been switching between zero interest deals for a while and have run out of new companies to use or can’t now qualify for enough limit.

This is probably the most common reason for a remortgage for debt consolidation application with us.

Remortgage to Repay Personal Loans

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A debt consolidation remortgage can be used to repay any outstanding personal loans.

Usually, personal loans are a higher interest rate than a mortgage, however, the term is usually 5-7 years approximately.

Unlike with credit cards, you are making repayments with a personal loan so these will be fully repaid at the end of the term.

Therefore, these could be carefully considered as part of your remortgage to consolidate debts options.

Remortgage to Repay Store Cards

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As with credit cards above, clients can often get lured into taking out store cards to qualify for deals with their shopping or points etc.

Maybe the store cards have started out being interest free for a period and now they’re at a high rate of interest.

Remortgage to Repay a Car Loan

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As with personal loans above, a debt consolidation remortgage can be used to repay your car loan. Often car loans can be restrictive and a high interest rate.

Your mortgage advisor will help you do the maths with this to see whether it’ll be worth consolidating this on to your mortgage or not.

Important Recap of the Risks Associated with a Debt Consolidation Remortgage

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A debt consolidation remortgage can be used as part of a financial plan to consolidate the above credit card and loan balances into one monthly payment.

They do not come without risks though and it’s vital that you seek trusted mortgage advice to explore all your options. Please always seek advice from a reputable mortgage advisor with this situation.

Your Home Being Repossessed

Potentially, you could end up in a much worse position here without an expert mortgage advisor on your side.  This could prove extremely costly and result in you homeless should anything go wrong.

If you are using a remortgage for debt consolidation to consolidate unsecured debts such as credit cards and personal loans, these will now become secured on your home.

Your new mortgage lender will hold the first charge over your property until this mortgage is fully repaid.

This means that if you ever defaulted on your mortgage payments, your property could be repossessed by your lender.

Your lender would then sell your property on the open market and use the proceeds to repay what you owe them including any interest.

Your advisor will talk to you about some of the things that could affect your ability to maintain your mortgage payments, such as how could you afford to pay if you went off sick.

Paying More Interest Over the Long Term

A debt consolidation remortgage is usually spread over a longer term than a personal loan therefore the total amount of interest you pay over the length of the new mortgage term will likely be more.

A good mortgage advisor will let you know your options with overpayments and how doing this on a regular basis can significantly reduce the amount of interest you repay.

Getting into Debt Again

It’ll be a condition of your mortgage offer that your agreed debts are repaid, typically by you, following your mortgage completion.

You run the risk of getting everything cleared and making a fresh start, only to be tempted to get into debt again in the future.

Examples include taking out a new car loan, taking out a store card to get an offer etc.

Another debt consolidation may not be possible in the future, the lender will most likely reject any future application based on your conduct with lending.

Following a successful remortgage for debt consolidation completion, certain lifestyle changes should be considered by clients to ensure this doesn’t happen again.

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