Consolidating debt into new mortgage

A loan with a longer term may have a lower monthly payment, but it can also significantly increase how much you pay over the life of the loan.View the Total Cost of Borrowing Before you apply, we encourage you to carefully consider whether consolidating your existing debt is the right choice for you.The idea of consolidating debt is a pretty simple one, and has been around for a long time.In essence, the idea is that you take a number of debts - for instance credit card balances and loans - and pay them off by moving them to a single, cheaper debt.Many lenders require at least a ten percent down payment on the home.For the example listed above, if there was debt in excess of £15,000, it would not be possible to incorporate the debt consolidation into the mortgage (£300,000 base price less the £30,000 down payment, plus the £15,000 credit card debt maxes out the loan to value ratio).

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For instance, if an underwriter requires a 95% ratio, and the home is valued at £300,000, the maximum value of the mortgage can be no more than £285,000.

Available consolidation loans often carry stringent qualification requirements.

If your lender allows you to include short-term debts into your home loan, however, doing so can make your financial obligations more manageable.

Not all lenders will allow you to roll your old debts into your new mortgage.

If your bank agrees to let you use your mortgage to consolidate your debts, your loan must fall below a certain loan-to-value, or LTV, range.