Consolidation Mortgage | The Sensible Debt Solution
If you have several debts it is understandable that you might get desperate. All the time you are faced with repayments for old debts and debts that were taken out to help with the original debts. It’s a vicious cycle that can lead to very serious situations like bankruptcy and repossession. A consolidation mortgage can break that cycle. Taking up all your debt and using a remortgage as a means of integrating that debt into your mortgage means no more debts, aside from your mortgage. Of course there are downsides to a consolidation mortgage, but it can work and it can get you out of debt.
And this is the sensible option – a consolidation mortgage will mean one rate that should be affordable. It also means your credit score can begin to be repaired. A consolidation mortgage can act as credit repair, actively improving your situation. It will not leave you homeless or penniless and you will know exactly how much you owe each month. A consolidation mortgage is a solution that works.
So the money is taken from your home’s equity, and then all your debts are paid off, leaving your monthly mortgage payment. Now in these tougher times that is going to be higher than it would have been a year ago, but a consolidation mortgage is still going to be a lot lower than a credit card rate, or an unsecured rate. It also means you must sacrifice some of your equity, which in these economic conditions can be dangerous. Lenders are relying on equity to balance the risk of mortgages, so while you pay off your debt with a consolidation mortgage, you may be more at risk long-term.
To make sure the risk is minimal and to make sure the consolidation mortgage will work for you, advice is paramount. Talk to a mortgage adviser and see if your situation fits with a mortgage that will absorb your debts. Maybe your debts are too severe for consolidating with your mortgage – that’s fine, a good adviser will always find alternatives for you. Or maybe your debts are not serious enough for a consolidation mortgage. Again an adviser will offer different solutions.
Debt can be crippling and it can ruin lives. A consolidation mortgage will help stop the financial rot and give you time to breathe, take stock and begin clawing back some ground. A consolidation mortgage will not solve all your problems but it could be the first, most important step.
