These days our finances are a lot more complex than they used to be. Mortgages, Loans, Credit cards, Car Loans, Store cards, it goes on.
Quite simply debt consolidation means taking two or more debts and replacing them with one larger loan to pay off the two existing loans. Using mortgage finance is the cheapest way to raise money.
People chose to do this for a number of reasons, but normally it is to reduce the monthly outgoings by taking the new loan over a long period, or by cutting the rates of interest they pay as mortgage finance is usually much cheaper than the rates you might pay on a credit card for example.
It sounds simple and easy but caution is required. What looks like a good deal may cost you much more than you think. You can use our free tools to work out the basics, for example, how much you can afford, using our mortgage calculator, MortgageAbacus, with its detailed debt consolidation engine, and what your property is worth with our valuation tool PriceMyPlace.
To consolidate debt more and more UK homeowners are remortgaging or taking a secured loan, but like all borrowing you should consider it carefully.
Remortgaging and Secured loans are not nearly as much hassle as most people think – but at the same time both have pitfalls if you don’t know how to navigate your way through the different lenders. Even with the big high street names, one slip of the pen on an application can signal trouble even if you have an A1 credit profile. One lenders rules do not apply to others and you would be amazed at the minor details that make a big difference to the outcome of your application.
