Remortgaging to consolidate debt means using the equity in your property as security for a mortgage to repay your existing debts.
The process involves obtaining a new mortgage to pay off the current mortgage, as well as other debts you may need to clear. This is known as remortgaging for debt consolidation. A remortgage can be an effective solution for some homeowners who are struggling with debt. More often than not, remortgaging is a case of finding the right deal from the right lender at the right time. If you’re familiar with the marketplace and understand the risks, remortgaging can be an excellent method to pay back your debts. But it's not suitable for every homeowner.
Bennett Jones has helped thousands of people solve their debt problems without the need to remortgage. We can offer a debt write off solution called an IVA. An IVA freezes interest and cuts your monthly repayments to an affordable level. Better still, any debt left unpaid when the term finishes is written off. The exact amount of your monthly payment will depend on your circumstances but can start from as low as £70. If you are a homeowner, once your IVA is approved your home is protected. If you have a private pension this will also be protected.
Should I consider remortgaging to consolidate my debts?
When implemented wisely, remortgaging can significantly reduce the monthly repayments required to repay your debts. In some cases, you’ll be financially stronger in the long-term as interest payments on remortgages are typically less than those charged on unsecured loans and credit agreements.
On the other hand, remortgaging does mean you’re likely to pay over a longer period of time. Depending on the agreement, this may result in higher overall payments due to interest. Furthermore, when you agree to a remortgage, your property is pledged as security to the mortgagee. If you fail to pay the mortgage repayments your house could be at risk of being repossessed.
How Bennett Jones can help
Our experienced team can provide you with information about remortgaging to consolidate your debts so that you can consider this information, alongside other options, for resolving your financial difficulties. Speak to one of our advisers today to take advantage of the information we can provide. If you’d like to set up an appointment to discuss your finances in further detail, you can also use our contact form to arrange a full consultation.