If your debts are pretty substantial but you”ve got a decent amount of equity in your property, then you may want to consider using some of it to pay off the worst debts. Remortgaging to release some of the equity will almost certainly result in a cheaper rate of interest than many other forms of borrowing.
You might want to remortgage for another reason, though, even if you don”t want to release any equity. Regardless of whether you are in debt or not, it makes sense to try and free up any money that is being spent unnecessarily. A mortgage is certainly not an unnecessary expense but more and more people are suddenly realising that they”re paying over the odds and are remortgaging to get a better deal. It doesn”t have to be hassle when you switch lenders, so a lot of people are obviously finding it”s worth the effort because of the savings they”ll make.
Remortgaging is really only feasible if you”ve had your mortgage for a few years. Think about the deal you got when you first took it on. Is it past its sell-by date? Do your circumstances now mean you could really do with reducing your monthly outgoings? Do you think you are paying over the odds with your existing mortgage?
If you”re rolling up your debts into your mortgage, there two things you need to be aware of. Firstly, because mortgages usually last longer than other loans, although the initial annual interest charge may be lower, it could end up costing you more in total interest charges. To get round this problem, look for a mortgage that allows you to make overpayments. This way you can pay down your debt quickly while still benefiting from the low rates that mortgages offer.However, if your credit profile dictates a mortgage that wont allow overpayments all is not lost speak to our advisors about our credit repair program. Secondly, because your mortgage is secured on your home, make sure you”re comfortable with any additional monthly repayments you need to make. As the adverts say, your home is at risk.
