At Prestige Mortgage Solutions we endeavour to assist clients with a wide range of circumstances and needs. If it is possible to get a mortgage then we will do everything to make that happen. With that in mind we are publishing a case study example below for which we have secured the required end result for our clients. Many of our clients have been turned away from their bank and other mortgage brokers.
Debt Consolidation – The Plan
The clients came to us as they were due to remortgage and already reached the end of their fixed rate deal but they are also looking to raise money to consolidate unmanageable unsecured debts as well as look to raise further funds to upgrade the property. They had around £36,000 worth of unsecured debt the majority being credit card commitments, they also looked to raise an further £10,000 to carry out the home improvements. Total capital raising of around £46,000.
Affordability
The clients income for affordability was reasonably comfortable for the mortgage they were looking to take out and benefited from having a significant level of equity in the property, however due to the level of debt and the clients credit score, this ruled out a wide range of lenders. Other lenders due to the level of the debt would consider the clients, although would treat the commitments as being ongoing rather than marking them to being repaid which ruled out these lenders. Despite a large proportion of lenders being unavailable we were still able to find a solution and come up with creative solutions to ensure everything fitted within complex lender criteria.
Credit Cards
Much of the unsecured debt was on credit cards. The issue with credit card debt from a mortgage perspective is that they have an impact on the lending you are able to borrow and can significantly impact your credit file score. Also if you are making the minimum payment to a credit card you will be paying predominantly interest to maintain the balance and paying this down only slightly which means you will essentially continue to make a similar monthly payment each month without the balance decreasing.
The Figures
To work this out on a monthly basis the client was paying the following –
Mortgage – £1117 per month
Credit Card commitments – £1,325 per month
New mortgage payments – £1540 per month
Consolidating debt within the mortgage has saved the client around £902 per month. Not only that by enveloping the commitments into the mortgage this will all be paid down on a monthly basis, unlike making the minimum payments to a credit card.
Our clients were refused by their bank, they were also told by other brokers it was not possible….
If you are in a similar position and would like to find out if we can help you please contact us for a free mortgage consultation.
*** This article is not mortgage advice and should not be understood to be mortgage advice. The figures have also been simplified for illustration purposes. For mortgage advice please speak with our independent mortgage advisers who will discuss your individual circumstances ***