How to get a mortgage with the consolidation of debt?
Life is full of ups and downs, and in life, there are situations when you have to take on debt to accomplish your goal, which would be either your dream home or your educational loan, your business loan, and so on.
If you have multiple debts, you can combine them into one and thus consolidate debt. Through debt consolidation, you can pay several loan instalments simultaneously.
To consolidate your debts, ask your lender to lend you money equal to or greater than the value of your property; this will allow you to pay lower interest rates.
Moreover, your earnings can be easily simplified by consolidating your debt. However, think twice before using your home equity as collateral before getting a mortgage to consolidate debt, and learn more about how to manage your debt consolidation mortgage. We at MortgageKey will tell you about mortgages with debt consolidation.
A debt consolidation mortgage
If you are planning to get a mortgage, there are several ways you can use the equity you own to consolidate multiple loans into a single payment, helping you better manage your finances. But as a first-time buyer, you would not be able to convert your debt consolidation into a new mortgage.
Almost any outstanding debt, including loans, credit cards, hire-purchase contracts, bank cards, personal loans, and school loans, can be converted into a consolidation loan on your current mortgage.
Debt consolidation will allow you to reduce your monthly expenses. For instance, if you took out a personal loan for £15,000 with a 10-year term and a 9.9% APR, your monthly payments would be £193. But with a 10-year debt consolidation loan at 3% interest, the loan repayments would be £145, saving almost £50 per month.
In general, insured lending has substantially lower interest rates than uninsured lending.
Paying off all of your loans with one lender rather than dealing with numerous lenders, each with a different interest rate, can help you quickly tackle your financial management.