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Can I Remortgage in Sheffield to Pay Off Debt?

As homeowners approach the end of their mortgage term, they have various options available to them. The most common choice is to remortgage in Sheffield, where a new mortgage is taken out to replace the old one, often with a better deal.

Not everyone wants to secure a better deal. Some homeowners opt to remortgage in Sheffield for the purpose of releasing equity or making home improvements, while others consider product transfers as an alternative to remortgaging.

Product transfers involve staying with the current mortgage lender but switching to a new mortgage product with them.

Another frequently encountered option is a debt consolidation remortgage in Sheffield. By consolidating unsecured debts like credit cards and loans into a single, more manageable mortgage payment, homeowners can reduce their monthly expenses.

Securing unsecured debt against your home is a complicated process that usually requires expert guidance. It is always advisable to seek professional mortgage advice in Sheffield before proceeding with a debt consolidation remortgage.

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How can I pay my debts by remortgaging in Sheffield?

In order to consolidate your debts through a remortgage in Sheffield, your mortgage advisor in Sheffield will assess your eligibility based on the equity available in your home. Equity represents the difference between the value of your property and your current mortgage balance.

It is essential to have enough equity in your property to support this type of remortgage, just as with a remortgage in Sheffield to release equity.

In this scenario, you will use a lump sum to pay off your unsecured loan debts, and these costs will be added to your mortgage balance, extending your repayment term.

This extended term means you will end up paying more interest over time, resulting in higher overall payments than before. It is important that you carefully consider the long-term impact of this approach and seek expert mortgage advice in Sheffield before you go any further with it.

Can you remortgage in Sheffield early?

The viability of remortgaging in Sheffield before the end of your term, entirely depends on how far along you are. Generally, homeowners will start the remortgage process six months ahead of time, so that their new deal starts when the old one ends.

Remortgaging in Sheffield earlier than this may come at a significant cost, as there may be early repayment charges to contend with. For instance, if you’re only two years into a five-year fixed-rate mortgage, you’re likely to face an early repayment charge if you choose to remortgage earlier.

While it may be a viable option in some situations, it’s important to remember that you’d be forfeiting your current, likely cheaper mortgage deal, and the money spent on the ERC could be used to pay off your debts.

Before considering an early remortgage, it’s essential to take expert mortgage advice from a mortgage advisor in Sheffield. They can help you determine whether this is the best option for your unique situation or whether an alternative, such as a further advance, may be a better choice.

Are you able to take out a further advance?

A further advance is a type of additional borrowing that allows you to borrow more money from your current mortgage lender, typically at a different interest rate than your primary mortgage.

Although it can be used for home improvements, it may not be the best option for debt consolidation since you are securing additional debt to your home. This means that if you are unable to keep up with payments, you risk falling into arrears and potentially facing repossession.

A further advance can be a viable option if you are not yet eligible for a remortgage in Sheffield, such as if you are still within your fixed or introductory period. It can provide a means of paying off your debts and spreading your costs across your mortgage term with lower interest rates than a personal loan.

To determine if a further advance is the best option for you, it is recommended to speak with a mortgage broker in Sheffield who can assess all available options.

The Pros & Cons to Remortgaging in Sheffield to Pay Off Debt

Like any mortgage options, remortgaging in Sheffield to consolidate debts has both it’s benefits and risks.

The most significant advantage is that it can lower your overall monthly payments by merging your credit providers’ payments into one manageable mortgage payment, however, increasing your mortgage amount means that you will pay back more over a longer period.

This could free up more disposable income or allow you to overpay on your mortgage if it is appropriate. It is important to note that consolidating your debt may be more expensive in the long run since you will pay the lower interest rate for a more extended period.

Moreover, consolidating your unsecured loans puts your home at significant risk since these loans are now secured against it. If you miss any payments, you could face the possibility of repossession.

Therefore, it is crucial to carefully consider the risks and benefits before opting for a remortgage in Sheffield to consolidate debt. Is the potential loss of a family home worth consolidating your debts? It would be better to speak with a mortgage advisor in Sheffield before making any decisions.

Should I remortgage in Sheffield to pay debt?

At the end of the day, this ultimately depends on your individual circumstances. Although it can be a risky move, it can also provide significant benefits and help you improve your financial situation.

Before making any decisions, it is important to get mortgage advice in Sheffield from a qualified mortgage expert. Our mortgage advisors in Sheffield are available for a free mortgage appointment to discuss your options and recommend alternatives if there are any available.

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.

Last Edited 15/05/2023

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