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- Cut Out The Expensive Debt Firms If Your Deep In Debt - Use A Remortgage To Consolidate Instead
Cut Out The Expensive Debt Firms If Your Deep In Debt - Use A Remortgage To Consolidate Instead
- By Marcus Selmon
- Published 01/4/2012
- Real Estate
- Unrated
The financial crisis that swept the UK in 2008 has left many people in a position whereby they are unable to keep up with constantly increasing rates of interest on their unsecured debts, causing stress and concern that their lives will end up in tatters.
Unsecured debts are more often than not on interest rates that can vary, often with short notice, so the interest that you pay can change each month. This causes your monthly repayments to vary too, so it can be very hard to budget a monthly amount.
And interest rates are not the only thing that is going up at rapid rates. Utility bills such as gas and electricity, fuel costs and food are all increasing at frightening rates, and this is leading to many people no longer being able to afford large debt repayments.
But there may be a way to rectify the issue of unaffordable levels of debt repayments. Remortgaging your home could allow you to borrow more funds against your property in order to pay off your unsecured debts and get rid of those nasty high interest rates.
A further advance is the name for borrowing more money on an existing mortgage, and the amount that you can secure against your home depends on how much of it you own. This is known as equity.
If you re
mortgage and borrow more money, you can use the equity locked up in your property to consolidate your debts, which should help your financial situation. The greatest benefit is that interest rates on mortgages are generally much lower than those on unsecured debts, so your repayments should be lower.
Unsecured debts typically carry very high interest rates, because you are paying for flexible credit that is not in any way fixed. Mortgages carry lower interest rates because your property is security for the loan, and you can get a fixed interest rate so that you know what you'll be paying each month.
A fixed rate mortgage is perfect if you are the kind of person that wants to be able to budget, and prefers to know exactly what your repayments will be down to the last penny. Although interest rates are lower, you will find that the longer you fix the interest rate, the higher the rate will be.
Variable and tracker rates are great when the base rate is falling month on month, because your repayments follow suit, but at the moment interest rates are due to be increased and thus a fixed rate is better if you want to avoid hikes in your mortgage interest rates.
By extending the term on your debts, be aware that it may end up costing you more so it is best to seek professional guidance to ensure that you are making the right choice for you.
Unsecured debts are more often than not on interest rates that can vary, often with short notice, so the interest that you pay can change each month. This causes your monthly repayments to vary too, so it can be very hard to budget a monthly amount.
And interest rates are not the only thing that is going up at rapid rates. Utility bills such as gas and electricity, fuel costs and food are all increasing at frightening rates, and this is leading to many people no longer being able to afford large debt repayments.
But there may be a way to rectify the issue of unaffordable levels of debt repayments. Remortgaging your home could allow you to borrow more funds against your property in order to pay off your unsecured debts and get rid of those nasty high interest rates.
A further advance is the name for borrowing more money on an existing mortgage, and the amount that you can secure against your home depends on how much of it you own. This is known as equity.
If you re
Unsecured debts typically carry very high interest rates, because you are paying for flexible credit that is not in any way fixed. Mortgages carry lower interest rates because your property is security for the loan, and you can get a fixed interest rate so that you know what you'll be paying each month.
A fixed rate mortgage is perfect if you are the kind of person that wants to be able to budget, and prefers to know exactly what your repayments will be down to the last penny. Although interest rates are lower, you will find that the longer you fix the interest rate, the higher the rate will be.
Variable and tracker rates are great when the base rate is falling month on month, because your repayments follow suit, but at the moment interest rates are due to be increased and thus a fixed rate is better if you want to avoid hikes in your mortgage interest rates.
By extending the term on your debts, be aware that it may end up costing you more so it is best to seek professional guidance to ensure that you are making the right choice for you.
Marcus Selmon
Marcus Selmon writes for Just Commercial Mortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.
View all articles by Marcus Selmon