Debt consolidation mortgages are a type of remortgage that lets you use the equity in your property to pay off any debts you owe elsewhere and then move them onto a single mortgage deal. To put it another way, it is debt consolidation with Home EquitSo in some cases, debt consolidation mortgages can simplify your repayments and reduce your amount of debt overall. It’s not for everyone.

Should I get a debt consolidation mortgage?

This is a personal choice however there are pros and cons you need to consider before you make a decision;

As explained before, borrowing and paying back money to multiple sources can be confusing and not easy to manage. With a debt consolidation mortgage, you may be able to make repayments to a single lender which is simple and easy to get your head around. And also as a remortgage is secured on your property, the interest rates are generally lower than a credit card, payday loans and personal loan rates. This means that monthly repayments could be much lower with a debt consolidation mortgage than with unsecured loans and you could pay less in the long term.

On the other hand, there are cons to consolidation mortgages. Unsecured debts (like credit cards and personal loans) are not secured on your property. However, when you do a debt consolidation mortgage you convert those unsecured debts into secured debts. This means that you could put your home at risk. If you can’t afford to make the repayments, the lender may try to repossess your home.

The other point to consider is that whilst Personal Loans and credit cards might only have a short term to run, your mortgage, in contrast, could have a longer-term meaning you could in fact end up paying back much more in the long run.

Remortgages can come with fees such as valuation Fees, Solicitors Fees and Lender’s Arrangement fees. etc,

Do I have to do a debt consolidation remortgage with my current lender?

No, you do not have to remortgage with your current Lender. However, we would as best practice comparing their rates too. So if a different lender has cheaper or better terms you might be able to switch over to them and pay off your debts.

Where can I get a debt consolidation mortgage?

Most major lenders offer debt consolidation mortgages, while specific lenders offer loans to borrowers with bad credit scores.

However before jumping ahead, add up all of your Loans and get the latest Statements so you have a clear idea of the…

• Amounts outstanding
• Interest rate being charged
• Early repayment charges

Get an idea of your monthly affordability, use a Budget planner to undertake a closer look at your income & expenditure and see precisely what your maximum monthly affordability is for a new loan.

Get the latest copy of your credit report to make sure that you are seeing the latest picture of your debts.

Finally and most importantly, arrange a debt Consolidation review with your Mortgage Broker.

Bad debt consolidation remortgage

At Robi Finance Ltd we understand that sometimes due to certain life events and difficult circumstances, you could get adverse credit markers on your credit report. This can make it difficult to obtain a mortgage from your average high-street Lender.

However, there are a group of specialist Lenders that are looking after this forgotten area and have the products to help.

These lenders don’t just use computers to assess the application and credit score, they still retain the human touch and will get an underwriter to look at your case manually and depending on the level of Bad credit, look to provide you with options.

However, bear in mind some of these lenders are not direct to the public and are only available through specialist mortgage brokers. So it’s best to use a competent Broker to research the market for you.