Specialist Remortgage Advice in Nottingham

When you start to approach the end of your mortgage term, you will have a range of choices to consider. The most popular option would be to remortgage; this is where you take out a new mortgage to replace your existing one, often with better terms.

Not everyone will be able to gain a better mortgage deal when remortgaging in Nottingham, however, this deal will still likely be better than your lender’s standard variable rate of interest. At the point of remortgage, some homeowners will try and release equity from their homes. This is known as remortgaging to release equity.

This equity is essentially a lump sum of cash, which can be used to fund home improvements, make repairs on their property or fund additional purchases. It is your money so you can do what you would like with it, and in some cases, you may be able to pay off your debt with this money.

Some people may also want to remortgage and incorporate some of their debt into their mortgage. This is done through debt consolidation, which is where you merge unsecured debts, such as credit cards and loans, into a single, more manageable monthly mortgage payment, thereby reducing overall outgoings.

Considering these two ways of paying off debt via your remortgage in Nottingham, it is important to know that these options may not be right for your individual situation. You should be careful of the approach that you take and consult with a professional mortgage advisor in Nottingham before making a final decision. In this article, we look at how you can remortgage to pay off your debt and the pros and cons of doing so.

How can I pay my debts by remortgaging in Nottingham?

If you have spoken to a mortgage advisor in Nottingham and have decided that a remortgage to pay off your debt is your best option, you must make sure that the route you take is the most beneficial to you.

Remortgaging to Release Equity in Nottingham

If you want to choose the option of releasing money from your home to pay off your debt, you must know that you need to have a certain amount of equity built up in your home to be able to release it. For example, you may need to have been paying off your mortgage for a set amount of time before you can take equity from your home.

The downside to releasing equity just to pay off debt is that you are extending your mortgage term and increasing the total amount that you owe. This option is only advised in certain scenarios, therefore, we would recommend speaking with an expert to see whether or not it is right for you.

Remortgaging to Consolidate Debt in Nottingham

Consolidating debt into your mortgage in Nottingham may not necessarily increase your mortgage term, however, it will increase your monthly repayments. Depending on the amount that you owe, your repayments may only increase by a little each month.

Before you are able to consolidate debt into your mortgage in Nottingham, your mortgage lender will conduct a deep analysis of the debt and where it has come from. Remember that you are trying to incorporate unsecured debt against a secured asset (your property), therefore, mortgage lenders need to be sure of where this debt has come from.

Once again, we strongly recommend getting specialist mortgage advice in Nottingham to discuss whether debt consolidation is the right way for you to go.

Pros and cons of Remortgaging in Nottingham to Pay off Debts

There are both pros and cons to remortgaging and paying off debt, let’s take a look at some of these reasons:

Pros

  • Your debt becomes more manageable because you are repaying it with the money that you have built up within your property or through monthly mortgage repayments.
  • Your unsecured debt is now registered against a secured asset.
  • The money that you owe is not receiving an interest rate.
  • Mortgage lenders will see that the debt has been paid off or that it is slowly being repaid.

Cons

  • Your mortgage payments increase or your term extends, sometimes both!
  • Mortgage lenders will be able to see that you struggled to pay off the debt that you owed and had to use another solution to repay it.
  • The length of time that you have been in debt and the amount that you owe/owed will appear on your credit file.

Should remortgage to pay off my debts in Nottingham?

As your mortgage broker in Nottingham, all that we can do is recommend and give you remortgage advice in Nottingham. Whether or not you want to take our advice is up to you. It is sometimes risky to incorporate debt, despite the fact that it can make your payments more manageable.

Everyone’s situation is different and that is why we would advise that you reach out to our team of specialist mortgage advisors in Nottingham, to get an idea of your mortgage options. In some cases, the solution you need may be as simple as a debt management plan (DMP), where you make an agreement to pay a set amount each month. If this is more suitable for you, our transparent mortgage advisors in Nottingham will recommend this for you.

You can give us a call, or book a free mortgage appointment online to speak with our experts. We have availability 7 days a week and would love to have a talk with you regarding your remortgage options.

You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.

Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.

Date Last Edited: November 22, 2023