How to get a Debt Consolidation Mortgage

02-November-2022 13:27
in Private clients
by Sam Hodgson
Debt Consolidation Mortgages

Anyone can be struck with financial problems at any time and new financial burdens can lead to accumulating debt. If you’ve found yourself in this situation, you may be considering a remortgage to raise finance and repay some of your loans.

What is a Debt Consolidation Mortgage?

If selling your property and downsizing to repay debt is not an option for you, or you’d simply like to stay in your current home, you may be considering a debt consolidation mortgage.

A debt consolidation mortgage allows you to combine your debt, which often makes it easier to manage and simpler to repay. This is different from a regular mortgage as there will be a heavy focus on your property's equity. Equity can be described as the share of the value you own in your property, rather than how much you borrow as a part of a mortgage.

This means if you have paid off a large percentage of your mortgage already, or if your property has increased in value since you first got your mortgage, you will be able to get a better deal when searching for remortgage lenders.

If you’d like to find the best deal available to you, get in touch with our experts at Clifton Private Finance who specialise in finding the best offers for your situation.

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Can I Remortgage to Pay Off My Debt?

You can potentially remortgage to pay off your debts. Many lenders offer mortgages for debt management, but your ability to get approved for a debt consolidation mortgage depends on your circumstances.

The circumstances which will affect your approval chances are things such as:

  • Your credit history
  • Your income
  • The share of equity in your home

Something to keep in mind is that you may still be able to get a mortgage to clear your debts with an undesirable credit history, so this shouldn’t deter you from researching this as an option.

Remortgaging can be a big decision which heavily impacts your financial situation and knowing whether you can afford to remortgage in the first place is extremely important. For the best advice, get in touch with our specialists at Clifton Private Finance who can help you through this process and find the best option for you.

Debt Consolidation Mortgage

Should I Remortgage to Pay Off My Debt?

If your debt is in unsecured loans, the interest rates may be much higher than you could expect to be paying when remortgaging your property—having loans owed to multiple different companies may add stress to an already difficult financial situation, as you may be concerned about keeping up with all the different payments to separate places. If any of these situations sound like the one you have found yourself in, feel free to get in touch with our experts at Clifton Private Finance and we can help you get started.

What are the Pros and Cons of a Debt Consolidation Mortgage?

The main things to consider when researching whether a debt consolidation mortgage is the right option for you are as follows:

  • A debt consolidation mortgage helps you combine all your debts into one, making it less stressful to repay
  • It gives you one central debt to repay and potentially stops you from forgetting about a repayment if you previously owed money to many different lenders
  • A debt consolidation mortgage may allow you to lower the overall interest you would have been paying
  • Depending on your situation, a debt consolidation mortgage could end up costing you more overall. Therefore, you should speak to a specialist before making your decision
  • You will need to meet certain criteria to be approved for this type of mortgage

How Do I Get a Debt Consolidation Mortgage?

To get a debt consolidation mortgage you should begin by speaking to a specialist mortgage broker about your situation, and they can help you decide whether this is the most appropriate option for you, and can then find you the best offer.

If you would like to find out more information or discuss your situation specifically, get in touch with our experts at Clifton Private Finance and we’ll help you find the best option available to you.


Click here for our full guide on remortgaging