Things are extremely tough financially out there for a lot of people right now and although we may be over the pandemic, there are still some hangovers left from that very difficult period of time.
One of those hangovers is the increased level of debt that we see, much of which is unsecured. Unsecured debt is given without any collateral requirement such as credit cards or utility bills. It’s believed that when work was difficult or non-existent for some people, it resulted in an obvious reduction in income, which in turn saw a greater reliance on debt, mainly credit cards, overdrafts, bank loans and even store cards.
The result now is that the monthly servicing of that debt has become increasingly more expensive and that’s before we start talking about the rise in interest rates. Couple this with the cost of living crisis and for some people you have a recipe for financial disaster.
However, one solution to this problem is a consolidated loan that is part of a property remortgage. Yes, it’s true to say that mortgage rates have increased but what you can’t ignore is the fact that renegotiated mortgages allow you to clear existing unsecured debt and spread the cost out over a longer period of time. Yes, it may well be slightly more expensive in the long run, but it undoubtedly makes everything much more manageable on a monthly basis.
Remortgaging isn’t always the first option considered when it comes to debt consolidation. You try to go through the options such as credit card consolidation and read things online like Individual Voluntary Arrangements (IVA) or bankruptcy and they can even seem attractive – at least in the short-term. You often search around for options on your own because you might be keeping it a secret from someone close to you and feel embarrassed to ask others.But remortgaging for debt consolidation can work if you seek advice.
At Sirius Financial we specialise in helping you find the right mortgage product. One that matches your needs, suits your property and works with your own very specific financial circumstance. But as reputable financial specialists, we always make sure that everyone understands the risks and in this case, your home is at risk if you don’t keep up the monthly payments. If, however that works smoothly, then what you have right there is a situation where the monthly cost of debt is reduced, making your financial life less pressured and your home life happier. For example:
House Value £300,000
Current Mortgage £154,000
Debts of credit cards and loans totalling £48,000
Current Mortgage Payment £570 pm
Current interest rate 2.39%
Current loan/credit card payments £1149 pm
New Mortgage with debt consolidation £202,000
New interest rate 4.55%
Term 32 years
New Mortgage Payment £999.64 pm
Saving £719.36 pm
You may have spent years working hard to make sure that your property is safely secured with a mortgage, so maybe it’s time for your property to start helping you out in return. We pride ourselves on being both approachable and professional but also operate with genuine empathy and understanding. So, if you are looking to consolidate your loans by remortgaging your property then you should be talking to us at Sirius Financial. We not only give you sound financial advice but we can offer you a full range of products that will suit your very specific remortgaging needs.