Remortgage: To Clear Debts
This is often knows as Equity release which is at an all time high in the UK despite uncertainty with economical changes and a stagnant property market. But how does it work exactly? Especially when it comes to clearing debts. In this post Mint Property Sales have outlined what it is to re-mortgage your property and how you can effectively use this solutions to clear off unwanted debts.
Put simply.. A remortgage allows you to use equity which is currently in your property to pay off creditors and unsecured debts.
How does a re-mortgage work with debts?
Firstly this option would only be available to home owners who have enough money in their home to clear off the unsecured debts.
You would go through an application process with a lender and make them aware you are looking for a loan to clear off your debts. If you are successful with your application all of your creditors will likely go into one, Creating one monthly affordable payment. It would be wise to speak to a qualified broker before making any decisions on lenders.
When is this applicable?
Remortgaging your property to clear off unsecured debts is not a one size fits all solution. Often times it will come down to looking at your personal finances and deciding whether your monthly payment once re-mortgaged will put you in a better financial position than before. If your payment becomes higher than your previous contractual payments, then it would be worth looking at alternative debts solutions.