November 10th, 2010
Debt Consolidation
A popular way to cut your monthly outgoings is to pay off expensive short term credit, loans and credit cards. Although interest rates generally have reduced in the past 2 years, unsecured credit can still attract high interest charges. Debt consolidation by means of a re-mortgage or a secured loan can substantially reduce your monthly payments and put all your debts into one lower monthly payment.
Re-mortgage
After using available savings the re-mortgage solution would normally be the first option as interest rates are generally lower than other forms of borrowing. Most lenders are happy to consider debt consolidation, subject to underwriting, although to qualify for the best deals your credit must be well paid with no arrears.
Secured Loan
A secured loan is a loan secured by way of a mortgage on your property. A secured loan would generally be considered when the re-mortgage option is not available. An example of this may be where your existing mortgage is on a fixed rate product and to re-mortgage would incur large early repayment penalties. Also, where as a re-mortgage requires credit to be well paid, secured loans tend to have more flexibility where it comes to adverse or credit arrears. Secured loans are more expensive than a re-mortgage but can still achieve significant savings on unsecured credit payments and a re-mortgage can always be considered at a later time when fixed rate products and penalties periods have expired.
If you would like to speak to a qualified mortgage and loan adviser to see if you would be able to cut your monthly outgoings, please click on the 'Speak to an Adviser' button below.