Debt Consolidation Remortgage
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Specialists mortgage brokers Nottingham
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Offer best advice for debt consolidation mortgages Nottingham.
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Debt Consolidation Mortgage Broker Nottingham
At Your Mortgage Manager, we're experts in a wide range of mortgage solutions, and one area we frequently assist our clients with is debt consolidation.
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Debt consolidation allows you to combine all your existing debts into a single, more manageable monthly payment. This can be done either by taking out a consolidation loan or by incorporating your debts into your mortgage.
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As specialist debt consolidation mortgage advisor Nottingham, we bring years of experience in helping clients streamline their finances. We take the time to carefully assess your individual circumstances and provide tailored mortgage advice, ensuring that debt consolidation is the right solution for you.
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We have strong relationships with lenders that offer debt consolidation options and are here to guide you through the entire process, making it fast, straightforward, and stress-free.
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Next steps with your debt consolidation mortgage
You speak to one our friendly mortgage advisors about your mortgage and which debts you are wanting to consolidate
Once the mortgage lender has approved your application you will be issued a formal mortgage offer.
Our advisors will search for the best remortgage rate and then submit an application for an increased mortgage amount to include the debts you are wanting to consolidate.
Once the solicitors have completed their work, they can set a completion date. Once you have completed, the debts will be paid off and you will only have your mortgage payment to pay.
What is debt consolidation mortgage?
A debt consolidation mortgage is where remortgage your current mortgage and increase your current mortgage amount to consolidate some of your debts.
Why would a debt consolidation mortgage help?
This type of remortgage helps people consolidate their debt into one affordable monthly mortgage payment. By consolidating several debts into one payment, it can reduce people total outgoings and therefor saving money on a monthly basis.
What debts can you consolidate?
You can consolidate all types of unsecured debts. As an example, personal loans, credit cards, store cards, credit agreements, overdrafts, buy now pay later agreements.
How do debt consolidation mortgages work?
You would need to own a property already so it would be a remortgage or second charge application, it can’t be a purchase application. You would increase the mortgage amount against your current property by the amount of money you need to consolidate the desired debts
For example if you’ve got a £100,000 mortgage outstanding and you want to consolidate £25,000 worth of unsecured debt.
You would increase the mortgage amount to £125,000 and pay the unsecured debt off with the equity you have released from your property, Once it’s completed and the debts have been paid off, you would now just have one monthly mortgage payment to pay.
Is remortgage and consolidate your debt more cost effective?
Consolidating your debt onto your mortgage usually reduces your overall outgoings so people tend to save money every month. However, by adding debt to your mortgage, you will be paying that debt off for a longer period of time. This is why the debt consolidation mortgage adviser would assess and calculate what would be your best interest.
What do you need to consolidate your debt?
The details about each individual debt you are wanting to consolidate, our mortgage advisers can help you get this. The lenders would also require your standard documentation needed for a mortgage application such as proof of ID, income documents.
Positives/negatives?
Positives – People can reduce their monthly outgoings and have more disposable income available each month.
Negatives – Turning unsecured debt, into secured against the property. Can sometimes pay more interest on the debt in the long term depending on the term of your mortgage.
How do lenders assess debt consol mortgages?
They will carry out their due diligence very similar to other cases, they will review check your employment, income, monthly expenses and of course your affordability. However with debt consolidation, they will want to know further information about all of your debts and how they were accrued. The mortgage lenders will want to ensure that by consolidating your debt, it will improve your finances.
Can you debt consolidate if you’ve got bad credit?
Absolutely, we help a lot of people with lower credit scores and people that have adverse credit consolidate their debts. As mentioned in the point above about how mortgage lenders assess debt consol mortgages, when an applicant has bad credit or recent adverse credit, the lenders will want to know why the adverse credit happened (adverse credit as an example having a missed payment on a personal loan or having a County Court Judgement CCJ)
Does debt consolidation effect your credit score?
Yes, it can effect your credit score, however potentially in a positive way. When you consolidate your debt into one monthly payment, all of your debt is paid off and if you keep it that way, it can improve your credit score as it’s shows you can manage your finances.
What are the next steps if I want to consolidate my debt?
The first step is always speak to one of our friendly professional debt consolidation mortgage advisers to explain your situation and what your plans are for the future. The adviser will review all of your personal information along with the debts to ensure debt consolidation is right option for you. They will search the market for the best debt consolidation mortgage rate and provide you with a tailored recommendation.
This recommendation will include the mortgage lender, interest rate, monthly mortgage payment and of course how much savings you will be making across your overall outgoings. Once you are happy with the recommendation, it would be time to get the mortgage application submitted.
Debt consolidation Remortgage Process
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First and foremost, is always speak to to our mortgage advisors to gather the information they need for the application and discuss which debts you are wanting to consolidate onto the mortgage. The new mortgage amount will need to be increased in line with what debts are being consolidated.
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We will search the market for the best product and submit your full mortgage application. Once the mortgage lender has reviewed your application and approved it, they will issue a formal mortgage offer.
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The solicitors will complete their work and set a completion date. If you are on a variable rate, completion can be any day, usually the soonest possible. However, if you are on a fixed rate, you would have to wait until that fixed rare deal finishes before you can switch, unless you are intending to pay the early redemption charge.
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On completion day. the solicitors handling the transaction will fully complete the remortgage and the consolidating of the debts part can either happen in two ways depending on the mortgage lender. Firstly, the money you have requested for debt consolidation would be paid back to you in full on completion day and then it’s your responsibility to pay your debts off. Or the lender can request the solicitor to pay the balances of the debts off in full directly with the providers.
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The amounts for the debt has been added to your mortgage amount making only one mortgage payment each month. This can make you huge savings on a monthly basis and can massively help with peoples finances
However, it’s important to mention, by adding the debt to your mortgage, you will be paying the debt off usually over a longer period of time in line with the mortgage term which can mean you can sometimes pay more interest on the debts overall. This is something the advisors will review and be sure that debt consolidation is right for you.
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