They have a deposit but don’t have the entire amount and require a loan from a lender. There is an application process, taxes, fees, and of course, monthly payments for a fixed period. The payments can be fixed or variable, depending on the desired interest rate. However, a remortgage is also possible, which means replacing the existing mortgage with a new one.

With the right product, a remortgage can help you in different situations. For instance, many people use debt consolidation remortgage to pay off debts. They need the extra money, and since they own a house and equity has increased, they qualify for a remortgage. However, there are more implications to discuss and some risks, so everything you do may have consequences. Therefore, hiring a mortgage advisor is of great help.

What Is Debt Consolidation Remortgage

Remortgaging refers to switching mortgage products with your current lender or going with a different lender entirely. Whenever you're thinking about remortgaging to pay off your debts, you should always get professional debt guidance before moving forward.There are primarily two ways that remortgaging can benefit you. First, you can pay off your other bills with the lump sum of equity released from your property. Secondly, it may lower your monthly mortgage payment, releasing cash for additional debt repayments.

For a debt consolidation remortgage, your application will be evaluated by a mortgage lender based on various criteria, such as your credit history, the value of the property, and the loan amount you require. Your credit score will be affected if you are behind on your mortgage or have any other unpaid debts, making it unlikely that you would receive a good mortgage offer. If the mortgage agreement hasn’t expired, you might need to pay an early redemption fee if you plan to remortgage.

When you own the property but have debts simultaneously, you can control them better once you decide to remortgage. The equity on the house can be used to pay off debts, and you can even use the same repayment plan from the mortgage lender. This means the interest rate is favorable. Of course, the wrong decision will have a negative impact. Therefore, it is recommended to analyze the situation as much as possible and discuss it with a specialist that knows the field very well.

What to Do Before a Debt Consolidation Remortgage

Remortgaging is a subject you should give great thought to. It's critical to gather as much information as possible before making a choice. You must think about some aspects very well and introspect your financial situation and goals. Look for essential elements, such as the expected interest rates, what term you find favorable, the new monthly payment and if you can afford it, if you prefer a fixed or variable mortgage, if the decision has a positive impact on your life, and what other refinancing fees exist. At ukmoneyman, you can discuss all these topics with an advisor and have peace of mind.

In a difficult situation, especially when you are vulnerable, it is not recommended to make decisions on your own. Maybe you don’t think clearly, and the decision will hurt your life. In the worst-case scenario, perhaps you will be unable to pay the monthly payments, and you will end up losing even more money. Even if you talk with someone you know, nothing compares with the level of specialization mortgage advisors have.

How it works

Lenders assess different aspects of your application and financial status to qualify for debt consolidation remortgage. Afterward, lenders will determine if you are eligible and under what conditions. You can end up in a great situation, meaning obtaining lower payments and managing your finances a lot easier.

As there is no collateral for the lender to rely on should you be unable to repay your debts, unsecured debts often have higher interest rates than secured loans. As a result, you might be eligible for a lower rate than you would if you maintained regular loan payments or if you took out an unsecured loan to pay off the other debts.

What you can pay  

A debt consolidation remortgage is ideal for people with unsecured debts who need to pay personal loans, credit cards, overdrafts, and other types of loans people usually get for different reasons. The truth is that properties increase their value over time, and especially if people renovate or extend their house, it raises even higher. This means there are greater chances of obtaining a better offer through remortgaging.

The amount you can obtain depends on the freed-up equity and the credit history. If you have bad credit, some lenders will deny your application, while others are willing to work with you to find the best solution. On the other hand, some lenders care more about your debts and how they were accrued. It all depends on who you choose in the end and how careful you are with your application.

Approach a Mortgage Advisor

Due to their market access and networking, dealing with a knowledgeable broker specializing in debt consolidation remortgages will give you a far higher chance of getting the best price for your needs and requirements. They might even be able to secure offers that are not made directly available to the public or offer a better option than increasing your mortgage's debt. Remember that mortgage brokers have connections with lenders you might not know about and have great products.

Some people might think that if they have a bad credit rating, they don’t stand a chance to borrow more money or discuss with a lender. Indeed, difficulties arise in securing a new package, but it is not impossible. Perhaps on the high street, there are lenders everyone heard about, but there are more than these, and you have more options at your disposal. Not to mention that a mortgage advisor can help you improve your rating.