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Remortgage your credit cards
Are you struggling to meet your credit cards monthly repayments, just managing the monthly repayments or on your credit cards or just tired of your credit card balance not coming down as you are unable to clear the balance?
If you are a homeowner with sufficient equity then re-mortgaging to consolidate your credit cards may be an option for you. A remortgage to consolidate your credit cards could mean they are fully repaid and could mean you save money each month and over years as the interest on mortgages tend to be far better than interest charged on credit cards.
Here we will look at the pros and cons of consolidating your credit cards into your mortgage.
Repaying your credit cards with a remortgage
Clearing and repaying your credit cards with a remortgage or mortgage can have many benefits, namely that fact that if you have been struggling to meet your normal monthly credit cards payments a mortgage or remortgage can clear the debts in full and enable you to wrap the payments up into your mortgage which will normally have better interest rates than a credit card.
In order to qualify to consolidate you credit cards into your mortgage you first need to make sure you have enough equity in your property, lenders refer to this as loan to value and we have pages on this site designed to show you how to work this out but very briefly - the loan to value is the amount you owe against the property set against how much the property is worth. When looking to consolidate debts into your mortgage its important to include the debts you are wanting to consolidate when working out the loan to value as this will be included in any new loan amount. However you may be entitled to a discount from the credit card company if you have arrears or missed payments and/or if the debt has been passed to the credit card companies collections department so whilst you may not be able to raise enough to clear what you owe on paper, you may be able to clear everything by applying for short settlement or asking the credit card companies to accept a lower amount to clear the credit card debts.
Can you afford to clear you credit cards with a remortgage?
When working out if you can afford to consolidate your credit cards into a remortgage or mortgage it may be best to speak to a professional adverse credit mortgage broker or a broker who understands what you are wanting to do. Although a mortgage lender may deem the mortgage affordable its best to make sure for yourself that the new payments are truly affordable, that being said the credit card debts will more than likely be paid in full so you will not have to make the payments to the credit card companies each month which should enable the additional borrowing on a mortgage more affordable.
You will obviously be paying interest on your new remortgage which may be lower than you were paying on your credit cards but you should also check the total amount payable over the mortgage term, a specialist broker can help with this. If you have missed payments on your credit cards it is likely your will need an adverse credit remortgage.
