The good bits of remortgaging for debt consolidation

Some good things about debt consolidation remortgages include;

You’ll almost certainly change your mortgage lender, often to a better deal if you’re on what’s called a standard variable rate
You’ll only have one monthly payment if you consolidate everything together
You’ll have the peace of mind that you know exactly how much you’re paying out per month
You might be able to free up some disposable cash month to month

The downsides of remortgaging for debt consolidation

There’s always a downside to everything though so don’t forget this is why you need to take advice; to make sure it’s suitable for you and your circumstances:

Your monthly mortgage payment could go up as you’re borrowing more money
Chances are if you’re stretching a 5yr loan over 25 years you’re going to pay more in total interest.
You might have to pay fees to switch your mortgage or even fees to set up the new mortgage so all these have to be taken into account

Could I have a Debt Consolidation Remortgage?

The answer is maybe. It’ll depend on a number of factors, including but not limited to; the amount and frequency of your income, your employment record, the current value of your home and how much equity you have, the size and type of debts you’re wanting to consolidate into your home, the length of time you have left on your current mortgage and your credit history. As with anything mortgage related there are certain things we can’t do and with a debt consolidation remortgage it’s the same. There are certain debts that we can’t consolidate as it just wouldn’t make sense to do so and these are:-

Any debt that has a balance of less than £1000 at the time of advice.
Any debt that has less than 9 months left to run at the time of advice.
Any debt that is on 0% interest at the time of advice.

Of course we have to take into account why you want to consolidate debt – after all lenders will want to know the following things;

How have the debts arisen?
Why does the client want to consolidate their debts?
What are they looking to achieve by consolidating debts?
How are they in the position to need to consolidate debts?

FAQ’s

What can I borrow?
Loan sizes range from £5000 to £15,000,000
How long are the repayment terms?
A mortgage can be over 5 to 40 years.
What are the interest rates?
They can start from 1.14% but this will be dependent upon a number of factors and this can change on a daily basis – and you might not be eligible dependent upon your circumstances
How much are fees?
This depends very much on each individual lender and mortgage product but you can assume they might be up to £1000

As you can see there’s a lot of information to take in and think about with this type of remortgage and it isn’t suitable for everyone. It’s best to talk to an independent mortgage broker that has experience of doing debt consolidation remortgages to make sure that it’s right for you and your circumstances and to clarify all the costs and fees that are mentioned above.

If you’re wanting to have a no obligation consultation then contact us below to schedule an appointment – the first appointment is always at our expense. We are independent mortgage brokers covering Mansfield & Sutton-in-Ashfield. If you need a mortgage broker in Mansfield or mortgage broker in Sutton-in-Ashfield we’re here to help.