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Debt consolidation mortgages may offer a solution for people with expensive high-interest unsecured debts including personal loans, credit cards, store cards and overdrafts. Most debt consolidation lending takes the form of remortgaging your existing mortgage to a new provider and topping up your mortgage borrowing by an amount that will allow you to clear off your other debts.
Why Use Debt Consolidation Mortgages?
The aim of debt consolidation is to reduce your monthly outgoings and make your payments more manageable, but it’s important to consider the pros and cons before committing yourself. While your total monthly outgoings may reduce, you’ll usually be repaying your debts over a longer term on the new mortgage. This may result in you being charged more interest and, in the longer term, it may end up costing more.
If you are struggling with debt repayments, a consolidation mortgage may be an option, but switching your debt from an unsecured to a secured basis may not always be the best course of action. If you should fall behind with payments on your new mortgage, you could lose your home.
We strongly recommend that you seek debt consolidation advice from a qualified, professional adviser before proceeding. At Just Mortgage Brokers we can provide impartial mortgage advice based on our years of experience in the market, and can help you decide which option is best for you – contact us today.