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What is a Debt Consolidation Mortgage?
Why Would I Consolidate Debts Using a Mortgage?
A debt consolidation mortgage can allow you raise finance and pay off your current debts, and consolidate them into one payment. A debt consolidation mortgage could help you improve your credit score and reduce your monthly outgoings.
Friends Capital have existing relationships with lenders of debt consolidation mortgages. We can help you find the best mortgage deal. We will review your personal circumstances and then search the entire market to ensure you get the best mortgage rates possible. We will then deal with all the paperwork, submit your mortgage application, liaise with your mortgage lender and solicitor, and ensure that your mortgage application is completed as quickly as possible. We can:
A debt consolidation mortgage is where you take out a single loan using the available equity in your property to help pay off debts such as loans and hire purchase agreements.
In order to qualify for a debt consolidation mortgage, a lender will assess the following:
A debt consolidation mortgage could work out cheaper for you in monthly payments and make your finances easier to manage. Not only this, the interest on the mortgage will likely be cheaper than the interest on an unsecured loan. With a debt consolidation mortgage, you may be able to pay off the following:
As you are releasing equity from your property, you can raise as little or as much cash as you like (subject to status).
Theoretically, if you had £5,000 on one credit card with an interest rate of 24.5%, plus a loan of £10,000 at 11.5% APR plus another loan of £7,500 at 16.95% APR, your combined debts would come to £22,500. With interest over a 10-year period, your amount paid could reach £45,923 – that’s £23,423 worth of interest. With a 10-year debt consolidation remortgage with an interest rate of 5%, you could pay back a total of £28,638 instead. It may be that in some circumstances you would be taking the term of a debt consolidation loan over a longer period so it`s important to talk to your broker about this and consider the costs involved.
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