Debt Consolidation Mortgages
If you are struggling with several debts and are feeling overwhelmed, you may be wondering if there is a solution to this issue – luckily, there is! Debt consolidation mortgages are a great way to manage all of your debts with one monthly payment.
At JG Mortgage Services Limited, we make sure to work closely with our clients to help with debt consolidation mortgages in the UK. If you need our services, please do not hesitate to contact us!
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What Are Debt Consolidation Mortgages?
A debt consolidation mortgage is where your other outstanding debt payments are added onto your mortgage each month. These debts can include credit card loans and bank loan payments.
If you want to retake control of your finances so you understand exactly where and when everything is being paid off, debt consolidation mortgages are a great way to do so.
There are several different ways that you can go about a debt consolidation mortgage. You can either remortgage your home and use the money to pay off other debts, or you can take out a new loan against your home to pay off other debts.
What Debts Can I Consolidate?
Mortgage debt consolidation allows you to combine a variety of debts. Common types include:
- Credit card debt – High-interest credit card balances can be paid off by consolidating them into a single, lower-interest loan.
- Personal or unsecured loans – Loans that are not secured by any asset (such as a car or home) can be included.
- Store cards – Like credit cards, store card balances can be consolidated.
- Overdrafts – You can utilise the loan to clear any overdraft sums in your bank account.
- Payday loans – Short-term, high-interest payday loans can be combined into a longer-term, lower-interest mortgage loan.
How Can I Check My Eligibility?
Eligibility for a debt consolidation mortgage depends on several factors. Here’s a breakdown of what you need to review before moving forward:
Check Your Credit Score
Your credit score plays a key role in evaluating your eligibility. Lenders will look at your credit history to determine the risk of lending to you. A higher credit score boosts your chances of acceptance and may allow you to get better interest rates.
You can check your credit score with one of the major credit reporting agencies, such as Experian, Equifax, or TransUnion.
Assess Your Affordability and Income
Lenders will evaluate your ability to repay the new mortgage and consolidated debts by reviewing your income, expenses, and employment stability. If your income has recently fluctuated or expenses are high, you may need to adjust your debt consolidation plans.
Calculate an LTV Ratio
Loan-to-Value (LTV) ratio compares your loan amount to your property’s value. Lenders usually impose LTV limits, and a lower LTV improves your approval chances.
For instance, if your home is valued at £200,000 and you owe £150,000, your LTV is 75%. Debt consolidation may raise your LTV, so calculate it to ensure it aligns with lender guidelines.
Speak to a Mortgage Broker
Before moving forward, speak with a mortgage broker who can offer professional advice on whether a debt consolidation mortgage is the best option for you.
At JG Mortgage Services LTD, our team will assess your financial condition, advise you on eligibility, and look into the best available mortgage deals for your situation.
Consider The Value of Your Property
The equity in your property affects your eligibility for a debt consolidation mortgage. Greater property value compared to your current mortgage simplifies borrowing more. If local property prices have increased since your purchase, you may qualify for a consolidation mortgage.
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Recently sorted our remortgage with JG Mortgage Services and i really couldn’t be happier with the amazing service by Josh & Joel. It has been such a stress-free process to what I have experienced in the past. There has no need to chase for updates etc, Josh/Joel have been in contact with me straight away via email or WhatsApp. Any questions I’ve had have been answered promptly, the service has been truly impeccable. I loved how all figures sent to us were super easy to understand so we understood exactly what out finances would look like. Josh even managed to reduce our interest rate from what was originally advised with our provider which we are delighted about. This for me shown just how they go above and beyond to help their customers to the best of their ability. The service provided and dedication to customers is very important to JG Mortgage Services and this 100% shines through on their work.
Highly recommended and we will certainly be in touch when our mortgage is next due. If you are looking for a mortgage advisor I would highly recommend JG, for me there will be no other options to use going forward.
Kelly & Carl J – 17/11/2022
How Is Debt Consolidation Useful?
Debt consolidation mortgages offer several key benefits:
- Lower monthly payments: Consolidating higher-interest debts into your mortgage can reduce your overall monthly payments.
- Simplified finances: With one payment to manage instead of multiple, staying on top of your financial obligations becomes easier.
- Potential interest savings: Mortgages typically have lower interest rates than unsecured debts like credit cards, potentially saving you money in the long run.
- Debt management: Consolidation can help you take control of your finances and focus on reducing debt systematically.
However, it’s important to understand that by consolidating debts into your mortgage, the repayment term could be extended, potentially resulting in more interest paid over the life of the loan.
Are There Any Risks?
It is important to note that yes, there are certain risks associated with debt consolidation that you should be aware of. These include:
- You’re securing previously unsecured debts against your home.
- Your home could be at risk if you can’t keep up with payments.
- You may end up paying more interest over the long term.
- It reduces the equity in your property.
- It could affect your ability to remortgage in the future.
Who Can Support Me With Debt Consolidation?
If you’re considering a debt consolidation mortgage, seeking expert advice is crucial. At JG Mortgage Services LTD, we specialise in helping clients manage and consolidate their debts through tailored mortgage solutions.
Our team of experienced mortgage brokers will guide you through the process, ensuring you make informed decisions about your financial future.
We’ll work with you to assess your unique situation, explain the pros and cons, and ensure you’re getting the best possible deal. From initial consultation to completion, we’re here to support you every step of the way.
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