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Remortgaging for Debt Consolidation

Maybe you’re thinking of a cost-friendly way to manage liabilities over a long period, or you’re a homeowner with unsecured debts and a mortgage; that’s enough reason to learn about re-mortgaging.

How far into debt are you? Here, you’ll discover what re-mortgaging is, including how debt consolidation works, its benefits, paying off unsecured debts, and so much more.

Remortgaging – What is it Really About?

In simple terms, a re-mortgage happens when a person takes out a new loan to offset the previous one. Likewise, when you swap a mortgage lender or opt for a different product with an existing lender, it’s also termed as re-mortgaging. You can manage your debt and minimise your monthly mortgage expenses.

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For a long time, people have leveraged the ability to remortgage and found it to have enormous financial benefits.

Here are some of the ways a remortgage can help alleviate your debt:

  • It can help you save money monthly when you switch to a cheaper mortgage
  • Through a debt consolidation remortgage, you can release equity in your home and raise enough capital to pay for other costs
  • It helps you to combine your debts into one to ease the repayment process over the long term.
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Debt Consolidation Remortgage – How Does It Work?

Maybe you’ve built up a backlog of debts from your mortgage, overdraft, credit cards, or even personal loans. These will each have a different interest rate.

Consolidating your debt – 3 key factors:

  • The amount of debt you’ve accrued
  • The interest rate on your debt
  • The number of creditors you’re indebted to

When you remortgage, you can consolidate all your debts into a single and lower monthly payment. That way, you’ll be charged one interest rate, clear loan terms and recurring payments (instead of multiple rates as before).

While you’re paying a lesser amount off your debts monthly, try to keep in mind that you will end up paying over an extended period. In other words, debt consolidation remortgaging works best for reducing your monthly payment.

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How to Apply for a Remortgage

To apply for a remortgage, first you will need to meet the criteria of the lender.

Although lenders have varying criteria, this will guide you in terms of what they will want:

  • Assessing the value of the property you are remortgaging
  • The amount of equity you own
  • Your credit history & credit score
  • The loan you plan to borrow against the value of the property.

After you have met the lender’s criteria, you may need to sign a contract through a solicitor as a way to confirm that the proceeds from the remortgage will be used to pay the debts entirely.

While a debt consolidation remortgage might seem like a viable solution, if the major source of your debts is from your credit cards, you might need to reconsider this option. Normally, credit cards have very high-interest rates and can be an expensive option when borrowing money.

Overall, when considering a remortgage like this, your best bet would be to discuss your intentions and options with a mortgage broker before making any commitments.

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Make Sure you Have Enough Equity

There are times when you need to weigh up your options carefully before remortgaging. Perhaps your current mortgage is up to 86% of your property value? If it is it could be a very expensive process. A good time to consider taking a remortgage is when you have sufficient equity in your property.

Offsetting Debts – Advantages

You could take out a loan of £15,000 over 4 years at an interest rate of 10%. Or a loan of £15,000 over 15 years with an interest rate of 10%. The second option would mean much lower monthly repayments.

A mortgage broker will help you to find the best interest rate to suit your circumstances.

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Can I Pay Off Unsecured Debts?

Yes, you can. No matter how deep you are in debt, you can get some relief. If you have had a property for a long period, its value usually increases. So, this means that there is good chance that the equity in your home outweighs your debts. You will pay more in the long run, and by speaking to a mortgage broker there will be an excellent chance of finding the best possible interest rate for the loan repayments.

Prime Financial Solutions and Mortgages Ltd

If you need help with remortgaging and any of the following, Prime can help – telephone 01942 665 436:

PRIME – THE BEST UK BROKER SERVICES FOR MORTGAGES & LIFE INSURANCE

The whole process of finding and choosing a new mortgage and getting approved can be a long drawn out process. You can explore your options with Prime – your current mortgage provider doesn’t always have the best deal for you. Searching can be frustrating, very time consuming and complex if you’re not sure how to go about it.

But when you choose Prime, you choose an already established company that works hard on your behalf to find you options, great options – that goes for both remortgages, mortgages and life insurance.

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At Prime we have an exceptional FCA approved team of life insurance & mortgage specialists working for you diligently and conscientiously. We provide excellent one to one services tailor made to your own individual needs and we make sure to make your time with us hassle free – we do all the heavy lifting.

Prime is very proud of the reputation it has built over many years, and this is largely reflected through the positive reviews we receive on a regular basis from customers in Wigan, Greater Manchester and across UK, in person, on Trust Pilot and Google online.

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Perhaps you need a mortgage broker right now to help you consolidate your debts with a remortgage and you may have some questions? Our dedicated team of experts is standing by to talk with you.

Consolidating debts can have a positive life changing impact on your life, not to mention the peace of mind it can bring. We have a range of services available including critical illness cover and much more. Advice and quotes are always free and you can find out more about us and what we do here – if you need help with anything else. Click here to Get a Life Insurance Quote or use our quick contact form to get in touch. Our friendly dedicated team is available by telephone 01942 665 436 during office hours.

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