Are you an existing homeowner struggling to manage your debt? Mortgage debt consolidation may be the solution you need to simplify your finances and take control of your debt.
At Newhomes we offer expert advice that can help you manage your debt more efficiently and help you achieve your financial goals.
Simplify your finances and take control of your debt
How does mortgage debt consolidation work?
This involves using the equity in your home to pay off other debts. This typically would mean taking out a new mortgage loan that is larger than your current mortgage balance and using the additional funds to pay off other debts such as credit card balances, car finance, or personal loans.
Once your debts have been paid off, you will have just one monthly payment on your new mortgage loan to repay each month.
Why consider debt consolidation?
The main advantage of using a mortgage to consolidate debt is that mortgage interest rates are typically lower than rates for other types of debt, such as credit cards. By consolidating high-interest debt into a lower-interest mortgage, you may be able to save money on interest charges and reduce your monthly payments.
Another advantage is it can simplify your finances, reduce your monthly payments, and improve your credit score.
Is mortgage debt consolidation right for you?
Mortgage debt consolidation has many advantages, but it is important to know some of its disadvantages.
An increase in total interest paid: Although mortgage interest rates may be lower than other types of debt, consolidating debts into a mortgage loan can increase the overall amount of interest paid over time.
Extended payment term: The mortgage payment term is often extended, which means you will pay off the debt for a longer period of time.
Risk of losing your home: If you cannot make your mortgage payments.
Contact us today for a no-obligation chat with one of our friendly expert advisors. We will help determine if it’s the right choice for your individual situation.
Benefits of working with Newhomes
Debt Consolidation FAQs
To be considered for mortgage debt consolidation you need to be an existing homeowner and have equity in your home.
Whether or not mortgage debt consolidation is right for you will depend on your individual financial situation and goals. It's important to weigh the potential benefits and risks, and to consult with a mortgage advisor to determine if it's the right option for you.
Mortgage debt consolidation can be used to consolidate a variety of different types of debts.
Generally, any unsecured debt with a high-interest rate can be consolidated using a mortgage. Including credit card debt, medical expenses, car finance and personal loans including payday loans.
The cost of mortgage debt consolidation will vary depending on several factors, including the size of the mortgage, the interest rate on the mortgage, and any lender fees associated with the new and old mortgage.
Some mortgages come with prepayment penalties, which are fees you will occur if you pay off the mortgage early.
Debt consolidation can have a temporary impact on your credit score, as it will result in a new loan and a hard inquiry on your credit report.
However, making regular payments on your consolidated mortgage loan can help to improve your credit score over time.
Yes, there are options available for consolidating your debts, even if you have bad credit.
By working with a reputable mortgage lender and making timely payments, you can improve your financial situation and work towards becoming debt-free.
APR (Annual Percentage Rate) is the interest rate you'll be charged on your mortgage loan.
It's important to consider the APR when choosing a mortgage because it will determine how much you'll pay in interest over the life of the loan.
Our expert mortgage advisers can help you choose the most suitable option for your circumstance.