Remortgage to pay off debts

Remortgage to pay off debts but what can you consolidate into a remortgage or second charge secured loan?

Mortgage Lenders may allow you to raise money to pay off debts for a variety of reasons so a remortgage to pay off debts is a route that many clients choose. It could be a simple loan, credit card or a much more far reaching issues. You may also consolidate a number of credit lines at the same time to get a better rate or bring down you monthly costs but remember many of the above mentioned are unsecured debts and by transferring the debt into a secured entity like a mortgage you are risking losing your home should you fail to keep up repayments.

Think carefully before securing other debts against your home

Frequently asked questions on debt consolidation

1. Q) I have an expensive car loan can I get a better interest rate by consolidating this against my property
   A) Yes, potentially.
2. Q) Can I pay off my student loan by a remortgage?
3. A) Yes, but it could be the terms you are on with the Student Loan Company will be better. So we will need to assess whether this is the best option for you.
4. Q) I’m fed up as my credit cards 0% interest rate periods come round to quickly what are my options?
   A) At Niche Advice we have remortgage products with excellent long term rates. However, you would be replacing unsecured debt with a secured debt so your home would be at risk if you do not keep up with mortgage payments.
5. Q) I have an online peer to peer loan from Zopa can I pay it off by consolidating this against my house
   A) Yes, most lenders will allow this.
6. Q) Can I pay off a tax bill by debt consolidation?
   A) Yes, but you will be limited to second charge lenders.
7. Q) I bought my council house under the Right to Buy rules can I consolidate debt in the discount reclaim period (pre emption)?
   A) Yes, but you will be limited to second charge lenders.
8. Q) Can I pay off CCJs and defaults through a debt consolidation remortgage?
   A) Yes, but only with a handful of Lenders.
9. Q) Can I pay off my debt management plan by debt consolidation?
   A) Yes, but your Lender choice is limited so you will need to seek to a specialist mortgage broker such as Niche Advice.
10. Q) Can I pay off my individual voluntary arrangement by debt consolidation?
    A) Yes, but to qualify you must have been conducting the IVA satisfactorily.

If your looking to Remortgage to pay off debts please speak to one of our expert brokers by completing the online enquiry form on this page or call 020 7993 2044.

Think carefully before securing other debts against your home
You are consolidating your existing financial commitments, you should therefore be aware that whilst this may mean you will make short term savings, over the long term, you may end up paying more. This is because you may be extending the period of the loan. You are also transferring previously unsecured debts to a mortgage which is secured on your home. The reason you want to consolidate your existing debts is to reduce your monthly outgoings.

Please also be made aware Lenders tend not to look favourably on applicants that have a repeated history of debt consolidation so future finance, for this reason, may be hard to obtain.

Author: Payam Azadi

Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.

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