Consolidating some or all of your debts into your mortgage can help reduce your monthly outgoings
There are many reasons why consolidating your debts into your mortgage makes sense with the main advantage to reduce your monthly outgoings. We work with mortgage lenders who specialise in debt consolidation and can ensure you get the most suitable rates and terms.
Debt consolidation mortgages are used to pay off debts like credit cards, overdrafts, payday loans, car loans and hire purchase agreements by using the equity in your home.
Let's look at some of the typical debts that can be consolidated into your mortgage:
Credit card debts
Car loans or Hire purchase agreements
Having high-interest unsecured debts on things like credit cards and loans can start to affect your credit rating negatively if it all builds up too much, as mortgage lenders may start to worry you’re overstretching yourself and it can reduce the mortgage amount you can borrow in the end if your unsecured debts (like credit card and loans) are too high; either as the total amount you owe or the monthly payments you make each month.
Consolidating previously unsecured debts onto your property will mean those debts form part of your mortgage which is a secured debt on your home.
Debt consolidation may reduce your monthly payments but also may result in you paying more interest over the longer term. Your mortgage broker will consider carefully for you if this is sensible and advise you accordingly.
Debt consolidation is therefore an area where you should receive specialist advice to make sure you're not unnecessarily securing previously unsecured debts onto your property.
The amount you could borrow will depend on how much equity you have available, your credit history (if there’s any previous bad credit, a remortgage with bad credit may also be possible), and if you meet a lender’s affordability criteria; so your current income is going to be a significant factor.
Debt consolidation mortgages can let you borrow up to 90% of the value of your property.
It will likely reduce your monthly payments but it may increase the overall interest you pay back.
Consolidation of recent costs incurred for home improvement is available.
Putting your bills together could save you £100's per month and thousands in interest saved in total, especially if you have high-interest paying debts such as credit cards, pay day loans, and some type of personal loan.
However, your mortgage broker will review if this is advisable to consider as by adding the debts to your mortgage you're spreading the cost of the debt potentially over many years; therefore paying more in interest in the long term.
It takes less than 30 seconds to complete
Often the lenders will make assumptions or even worse let the computer make the decision on whether to lend to you. This is where we step in and help advise and arrange to ensure you get the correct mortgage and consideration by the lender at the application stage and we present your application in the best possible light; therefore increasing your chances of acceptance at first application.
Debt consolidation is not always the most suitable option, consolidating debts must be carefully considered. It will usually mean more interest over a longer repayment term and there may also be early repayment penalties on your current mortgage if you're looking to exit your current mortgage deal early, you should think carefully before securing other debts against your home. There are other ways to manage debt such as free debt advice charities, you can find out more by contacting the Money Advice Service as these services may be more suitable for you.
Our team of brokers are specialists with helping to consolidate debts into your mortgage and can help you understand the most suitable options available to you and advise when you should or shouldn’t consolidate certain debts.
Access to over +90 lenders so you will get the most suitable rates and terms available with many of these lenders not available on the high street as they're exclusive to brokers.
Real relationships with the lenders so we can get your application pre-approved if your situation isn’t straightforward. Plus your mortgage broker is there answer all the questions you may have.
We’re quick, on our first call we will quickly establish your options and let you know the next steps so we can arrange everything promptly for you.
If you prefer to speak face to face we can also arrange a video call.
Putting your bills together could save you hundreds of pounds per month.
The goal of a debt consolidation mortgage is to consolidate your debt by using the equity in your property to pay off your unsecured debts to bring your monthly payments down.