It’s easy for financial problems to suddenly creep up on you. It could be an unexpected boiler repair, a car breakdown or wanting to spend, spend, spend on the credit card to have a glittering Christmas!
And that’s ok when you can manage it. When your income comfortably covers your repayments. But then the unexpected can strike. Perhaps your income drops as there’s not as much overtime available, redundancy might strike or interest rates might go up and suddenly you can barely cover your credit card or loan repayments.
Particularly if you’re barely covering the minimum payment on a credit account then it’ll take an awfully long time to pay that back and at a crippling interest rate.
That’s when it can make sense to include your debts into a remortgage so you can pay the debt off and repay it at a lower interest rate as part of your mortgage repayments. [Always take advice to see if this course of action is appropriate for your circumstances].
Rules differ between different lenders as to what level of debt that’ll allow you to consolidate but that’s where we come in as we specialise in finding the right package for you. We’re a whole-of-market broker so we’ve got plenty of lenders & packages to choose from – many of them not available on The High Street.
What is a debt consolidation mortgage?
One option when dealing with debt would be to sell your property, downsize and use the excess to pay off your debts but people are usually keen to not move if they’re happy with their home and so roll the debts into the borrowing as part of a re-mortgage. The amount of equity you have will affect how likely it is that the lender will approve the loan.
Can I have a fixed rate mortgage?
There’s a wide range of mortgage deals that will allow debt consolidation so in principle, yes. But let’s talk your situation through and find you the best deal. Start Here!
Can I consolidate if I have a bad credit file?
Don’t despair! It’s often very much possible to get a debt consolidation mortgage with adverse credit information or even a CCJ. You’d be surprised how many people have some form of adverse credit information (what you might call a bad credit score) and how willing lenders are to consider packages that after all, will help reduce monthly outgoings.
But it’s important to only approach lenders who are comfortable lending to those with debt or bad credit and that’s where we can help with our knowledge of the marketplace.
Will it damage my credit score?
So long as you don’t consolidate and then run up new debts then it may well help. Before consolidation, your credit file would be showing adverse information such as missed payments, defaults or even CCJs whereas afterwards, the file should show satisfied judgements & defaults along with a regular demonstration of regular mortgage payments made on time.