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Debt Consolidation Mortgages

Financial issues can happen at any time and your situation may change unexpectedly. Whether it is the need for unforeseen repairs, ill health, the loss of a job, or a family emergency, there may come a time where you need financial help. However, if these issues persist and you find yourself paying off a number of debts, a debt consolidation mortgage may be able to help. With this type of consolidation, you can use the equity in your property to help release yourself from your debts.

  • Years of experience in the finance industry
  • Large panel of debt consolidation loans lenders
  • Personal approach to application reviews
  • Bad credit applications considered
  • Easy online application process
  • FCA authorised, responsible broker service

We are a debt consolidation loan broker service, offering a large panel of lenders, many of whom provide debt consolidation mortgages. We take the time to personally check each application for your needs and affordability, then turn to our lenders to find the best solution for you. Once we have found the best debt consolidation mortgage for your requirements, the lender will be in touch with you to finalise your application.

If you are ready to start your application, simply apply online and our team will work quickly to return with a lending decision.

What Are Debt Consolidation Mortgages?

With a debt consolidation mortgage, you are able to use the equity in your home to pay off your debts. By applying for a debt consolidation remortgage, you will typically be offered a larger sum that covers both your existing mortgage and any debts that you wish to consolidate. This involves releasing some of the money you have already paid towards owning your home, which could reduce the amount of debt you owe overall, allow for easier budgeting, and remove some of the pressure from your finances.

Consolidating debts within a mortgage is a common way to handle finances that are becoming difficult to manage. Debt consolidation remortgages are popular because some lenders will ask for a form of security for the debt repayments, which would usually be the borrower’s home. In this case, the additional mortgage that is reserved to pay off your debts becomes known as a ‘second charge’.

How Does A Debt Consolidation Remortgage Work?

In order to qualify for a debt consolidation mortgage, a lender will usually review:

  • Your credit report and your current debts
  • The value of your home
  • How much you want to borrow
  • The percentage of your home you own outright

When submitting your application, it is wise to keep these pieces of information to hand to keep the process moving as slowly as possible. If you do not own your own home or need another form of consolidation, we also offer debt consolidation loans for bad credit. While these will require a credit file check, they are mainly based on affordability to ensure you can comfortably make repayments.

Once your application has been approved, you will be able to pay off your debts and owe money to a single lender, rather than paying multiple amounts each month. This can help with budgeting, paying off your debts quicker, and giving you peace of mind.

What Are The Benefits Of A Debt Consolidation Mortgage?

When you enter into a debt consolidation mortgage, you could be taking a step towards a clearer mind about managing and dealing with multiple debt repayments. There are several benefits to consolidating your debts into a mortgage, including:

  • Easier budgeting – you may have found it difficult to create a monthly budget when you were paying off multiple debts. With a debt consolidation remortgage, you can merge your existing debts into one sum. This could include debt consolidation loans for credit card debt, car loans, and store cards. By combining each repayment figure into one monthly fee, repayments may be easier to manage and you could find it simpler to create a budget.
  • Reduced overall payments – if the interest rate on your debt consolidation mortgage is less than the combined interest on your previous debts, you may be able to save money each month. As each credit account may have had varying interest rates, you could have been paying more than you might from the remortgage with a single interest rate.
  • Boosting your credit score – if you are able to pay the required amount off each month, you may see a boost to your credit rating. Once you have paid off the full amount, this will show on your credit file as a closed account with full repayment, which would be ideal for future credit applications. If your credit score is less than perfect, we do offer other options, such as debt consolidation loans for poor credit.
  • Peace of mind – paying off multiple credit accounts may cause understandable stress. However, by combining your debts into a more manageable figure and having an achievable scheduled repayment date each month, you may find peace of mind.

While there are benefits to a debt consolidation remortgage, it is something that needs to be considered carefully before applying. If you need more support with your financial situation, please contact the Money Advice Service before applying for a debt consolidation mortgage.

What Are The Risks Of A Debt Consolidation Remortgage?

Along with the benefits of debt consolidation mortgages, there are a few risks that also need to be considered. This type of solution is not suited to everyone, so make sure that you think about each point carefully to determine whether this is right for you. The risks include:

  • Negative equity – negative equity is when the size of your loan is larger than the value of your home. If you are in negative equity, it could be hard to remortgage or switch to another financial product with your lender. This could happen with the more you borrow, so be cautious about how much cash you need.
  • Losing your home – if your home has been used as collateral in a secured debt consolidation loan, you risk losing the property if you do not keep up with repayments. While using your home as security may result in cheaper interest rates, it is a risk if your repayment situation changes in the future.
  • Paying more overall – while some debt consolidation remortgages may result in you paying less overall, some may result in you actually paying more. It is wise to conduct your own research to find the best interest rates and find a lender that offers a more affordable deal than what you had been paying.

Before you apply for a debt consolidation mortgage with us, you should review your current affordability or contact us for more guidance.

Choose Us For Your Debt Consolidation Remortgage

At Debt Consolidation Loans, we are proud to hold our applicants’ best interests at heart. We aim to offer flexibility in our repayment plans, and with our debt consolidation remortgages, you will be able to make payments on a set date each month. This can help you to budget, as well as give you peace of mind when it comes to planning your finances.

We take a personal approach in our application checking process to ensure affordability and understand our customers’ needs. We consider all applications and will do everything we can to ensure you can make repayments. However, if we feel that you would struggle to make repayments, we would need to decline your application for your own wellbeing.

If you would like any more information about debt consolidation mortgages or other options, such as debt consolidation loans for poor credit, please do not hesitate to contact us. If you are ready to start searching for the perfect debt consolidation remortgage, please apply now.

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