Also known equity release, a remortgage allows money tied up in a property or other asset to be made available to pay unsecured creditors.
How a remortage debt solution works
Remortgages are only available to home owners who have enough equity in their homes to cover of the unsecured debts.
You apply to a mortgage lender for a loan to reorganise, or clear your debts. This means you swap some or all of your creditors for just one creditor. You should seek independent advice about whether this would be in your best interests.
Important: If you can’t pay a remortgage or secured loan taken out against the value of your home, your lender may take action to repossess your home.
You should shop around for the best deals. If you have a poor credit rating, you may not be able to get loans on the best terms.
A remortgage will only help if:
- it is used to pay some or all of your existing debts.
- the repayments on the remortgage are no more than those you are already making towards your existing debts, and you can afford to make them.
Otherwise, the remortgage will simply add to your debt burden and make your problems worse. This could put your home at risk.
You will need to look carefully at how long the loan will take to repay, what interest you are going to have to pay compared with what you are currently charged; and what charges or penalties there are, for example for late payments.
A single payment
You will be making one monthly payment on one loan rather than many payments to different creditors.
Your monthly payments may be lower, or at least should not be any higher.
While there are benefits to consolidating several unsecured debts by remortgage, there are also important considerations you must take into account.
If you have a poor credit rating, you may not be able to get a remortgage or you may be offered poor terms and conditions, for example a high interest rate.
Swift do not currently offer secured lending products. You should seek advice from an independent financial advisor before considering any form of equity release. We can assess your situation and explain the other options available.