Posted on 2017-12-08
Have credit card, personal loan, or other unsecured debt that you want to consolidate? Well, the fact that you’re thinking about consolidating it all is a great first step. If you have a mortgage, even better.
Consolidating debt into your mortgage is one of the most time and cost saving ways to get your life back on track and break the debt cycle.
Out of all the debts you may have, your mortgage is likely to be the largest, but also the one with the lowest interest rate. It is for this reason that many borrowers aim for this option first as it can save you thousands over time and also mean that instead of making multiple repayments at various times of the month to various banks and lenders – you make only make your mortgage repayment.
Here’s how you can consolidate debt into your mortgage:
Refinancing to consolidate debt involves the process of taking out loan of a larger amount and using the additional funds to pay off existing debts. While the loan amount of your mortgage will increase, this strategy allows borrowers to pay off high interest rate debts and save on interest.
In the process of refinancing you may decide to change lender and find a better rate or product. This way you can save even more on your mortgage repayment.
Due to a lack of equity in your mortgage or a poor credit score maybe refinancing isn’t an option for you right now (don’t decide this for yourself, it’s best to speak with an experienced mortgage broker first). In this case, you may qualify for a low rate personal loan that can allow you to consolidate smaller personal loan debts, credit card debts or other unsecured debts into one lower rate loan. Again, this strategy saves you making multiple repayments and may save you on interest and time.
Debt consolidation is often considered a custom loan as there are many factors to be taken into consideration. There are also specialize circumstances that lenders may consider. Specialized circumstances include: