Debt Consolidation Mortgage FAQs

If you are interested in taking out a debt consolidation mortgage loan, then you will definitely benefit from taking a quick look at some of our frequently asked questions.

What is a debt consolidation mortgage?

A debt consolidation mortgage loan can help you lower your interest rates and monthly payment on the various debts which you are currently struggling to pay back. A debt consolidation mortgage allows you to eliminate all your credit problems in one swift payment by using your property as a means of security against a debt consolidation loan.

Will I pay a lower rate of interest with a debt consolidation mortgage than with an unsecured loan?

Yes, this is one of the many benefits of a debt consolidation mortgage loan. Mortgage interest rates are usually much lower than the interest rates for unsecured loans. Depending on your personal circumstances taking out a debt consolidation mortgage will give you a lower monthly interest charge to pay. However consolidating your debt in this way may mean that the total interest you pay on your debts could be more, as a mortgage is typically over a much longer period.

What benefits will I experience with a debt consolidation mortgage loan?

A debt consolidation mortgage allows you to repay your debts at a reduced interest rate compared to an unsecured loan. You will only make one monthly repayment which will be set within your budget for a fixed period of time. This fixed repayment period can either allow you to pay off your debt quicker or can allow you to pay off your debt over a longer period of time which will involve paying a reduced monthly repayment. For many people, a debt consolidation mortgage loan provides them with an excellent opportunity to avoid having to file for bankruptcy. In many cases, a person obtains a debt consolidation mortgage as a last resort before bankruptcy.

How much will I be able to borrow with a debt consolidation mortgage loan?

The amount of money which can be borrowed with a debt consolidation mortgage loan will largely depend on the appraised value of your house and how much of your mortgage is outstanding. Some debt consolidation mortgage lenders allow you to borrow from between £5,000 to £75,000 and sometimes up to 125% of your property value.

Can a debt consolidation mortgage help my debt situation?

A debt consolidation mortgage might be the best way forward for you if:

It will take you more than a year to pay off the debt which you owe
You owe money on more than five credit cards
You are only making minimum monthly repayments
You are paying an extremely high interest rate
Proposed increases in salary if these have been confirmed
You feel out of control and unable to manage your mounting debt

Adverse Mortgage Centre

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