What You Need to Know About Re-Mortgaging to Pay Your Debt
If you’ve never heard about re-mortgaging your debt, it refers to replacing your current debt with a brand new one. It can also refer to changing products or terms with your current lender, as well as switching to again, another mortgage lender.
It’s very important to ensure that you receive expert debt advice, before proceeding with the process of re-mortgaging.
There are two types of re-mortgaging. They include one where you can have equity released, which resides in your property, which results in you receiving a lump sum to repay your debts, as well as reducing your monthly payment on mortgage, which will require you to free up money, such as your retirement saving, to repay your debts.
Mortgage lenders will decide which option is best for you, as well as the entire process, which will all be based your application on your credit file, the amount you’d like to borrow, as well as the value of your property/ house.
In the event of your mortgage or other debts, being placed in arrears, your credit rating will be affected, and you’ll receive a better mortgage offer.
5 Things to consider before you opt for re-mortgaging
The reason why you must consult with a debt advisor is because re-mortgaging is a serious step and method to pay off your debts.
There are a few things you also need to consider, other than the expert advice you’ll receive from your debt advisor.
- What term do you want, or should you settle for?
- What will your interest rates be?
- What will the newly-structured payment plan and installments be?
- How do you choose which type of mortgage is best for you, if your choices include either fixed or variable?
- Will re-mortgaging aid in your financial struggles, and how?
Upon considering re-mortgaging, the best thing to do is to consult a professional, or perhaps even multiple professionals, in the debt-consulting industry. Debt consultants are trained to professionally assess your current situation, as well as provide you with various options on how to settle your debts.