Using your Mortgage for Debt Consolidation

Benefits of Consolidating Unsecured Debt to your Mortgage

Trying to have a hold on all of your debt can be difficult at the best of times. You may have multiple loans and debts for multiple reasons; debt consolidation can help reduce your overall repayment and manage your debt more effectively. Debt consolidation is simple; it brings all of the debt together under one single loan. Many people consolidate their loan into their mortgage, making it easier to bring it all together. There are multiple benefits to bringing all debt into one, but there are four major benefits of consolidating unsecured debt to your mortgage.

Does the Interest Rate make a difference?

By using Debt Consolidation, you can actually lower your overall interest rate that you are paying. The idea is that you are moving all of your debt to one location; this often requires the need to re-configure and restructure an existing loan. If you consolidate your loans, certain debts may be a lower interest rate because the new interest rate is better than the old one. While this may not happen with all debts, just because the new loan is being stretched over a longer period may reduce the repayment and hence make the loan more manageable. For example:

• The repayment on a $20,000 loan at 11% over 3 years is $652 per month. If this loan was consolidated into a 30 year mortgage with the same interest rate the repayment would be $190 each month. Effectively releasing cash flow of $462 each month.

The above example shows how people can get a handle on their finances. It could help you afford your monthly payments, where you may not have been able to as separate debts.

Why use a Mortgage to secure the debt?

The loan options available to consolidate your debt are using a Secured Consolidation Loan or an Unsecured Consolidation Loan. When a lender has security against a loan product they will offer you a higher loan amount and a better interest rate. Both these features allow a better result when consolidating your debts. A low loan amount may prevent you from consolidating all of your debts. At times this may prevent you from obtaining a Debt Consolidation Loan all together.

Convenience and Simplicity

The most exciting benefit of debt consolidation, however, is the simple convenience factor. By consolidating your debts, you are bringing all of your debt into one place. Many people often have 3, 4, or 5 loans and sometimes up to 10 loans; this can be very difficult to manage and keep all of your loan agreements. Paying one lender, with one interest rate, and one monthly payment can make your finances significantly simpler to manage.

Conclusion

Many people bring their loans together through debt consolidation as a way to make their lives easier and simpler; debt is never fun for anyone, but debt consolidation allows you to manage your debt more effectively and take control. Consolidation can allow for lower monthly payments, and the convenience of having it all in one place. Consolidating your debt into a mortgage is an even better way to bring everything together under one roof; and make your debt work for you a little more. To find out if Debt Consolidation is right for your, Contact us below.

This loan is designed for salaried or self employed people and is available for the purpose of financing personal, business, investment or debt consolidation needs. With this loan you can:

• Borrow from $50,000 up to $2.5 million, for a period of 10 to 30 years
• Obtain up to 90% Loan to Value Ratio with paying the Lenders Mortgage Insurance premium
• Chose from a variable interest rate or a fixed rate for 3 years
• Repay your loan monthly, fortnightly or weekly including by direct debit
• Step down to a lower variable rate from the 3rd anniversary of settlement provided you have no arrears on your loan and have not missed any repayments
• Chose a Line of Credit facility, including phone or internet, ATM and EFTPOS Access and monthly statements. This loan is ideal for people with a clear or bad credit history who:
• May need to borrow more money than the limits imposed by tradition lenders
• Have an inconsistent or inadequate savings history
• Have an unusual deposit, such as a gift.

With this loan you will need to provide proof of income in the form of pay slips, letter from your employer, group certificates, tax returns or, if applicable Centrelink letters or superannuation investments statements.

Loan Saver Network will look at your individual situation and provide clear advice, guidance and assistance to help you move forward and where possible obtain the funds you need to get your life back on track. A debt consolidation loan can help you achieve a more sustainable financial future.

Debt Negotiation is the art of negotiating loans and debts to an a lower than original figure. Debt Negotiation is required in circumstances where there is insufficient equity to consolidate debt into a mortgage, or even to reduce the level of debt (when consolidating) to an acceptable repayment. Debt Negotiation and Debt Consolidation work closely together at Loan saver Network. Below is a true life example of how Debt Negotiation and Debt Consolidation loans can work hand in hand to give a very effective result.

John and Teresa had been through a string of business and investment disasters, that had left them in a situation where they had $135,000 in credit cards and personal loans. They werte both on very good incomes but they were struggling to get make their home repayments and had fallen behind on most of the credit cards and other loans. They were being faced with selling thier home and starting again, but they would have still been left with a sizeable number of debts. They were paying only $1100 on their home loan, but $2600 each month on their other debts totalling $3700 pcm. Loan Saver Network took a look at their situation and effected a Debt Consolidation Refinance and Debt Negotiation. We found their properties was valued at $240,000 with only a $130,000 loan against the property. The lending policies at the time only allowed in their circumstance a loan up to $216,000 giving them $86,000 available to consolidate all of their debts. The outstading debts required a debt negotiation from $135,000 to $86,000, a reduction of $49,000.

The end result is that we used Debt Negotiation to negotiate the debts, and refinanced the home loan with a Debt Consolidation loan. Their final loan repayment on $216,000 is $1710 per month. We saved them $49,000 on their loans, and $1990 each month on their repayments.

See Debt Consolidation for more information or Contact Us for more information.

David was a fully employed office worker in his mid-thirties on a salary package which comfortably supported his day to day expenses and that of his family including his month mortage payments on the family’s home, car loans and minimum payments on his credit cards. Unexpectedly he developed a gall bladder problem which caused him to lose control of his bowels. Because of the nature of his condition, he was forced to take six months off work for treatment until he was fully recovered. During this six month period with no income coming in, the family was forced to pay for their daily living expenses with credit cards. David was not in a position to pay his loans and defaulted on his mortgage and car loans. His loans looked like the following:- Mortgage: $202,000 at $1550pcmCredit Card: $22,000 at $660pcm. Also in default with debt agreement to pay $10,000 to close account.Car Loan 1: $13,000 at $390pcm (3 months behind)

Car Loan 2: $29,000 at $900pcm (3 months behind)

The critical things to consider in this situation were:

• Bank was ready to foreclose on his home and both car loans
• Credit card company was willing to take 10k to close the account.- Home Value: $330,000
• Total Loans: $ 254,000
• Current repayments: $3500 Upon his recovery, David assessed his situation and realised that it was impossible for him to try and pay off all his defaulted loan repayments, credit cards as well as interest and penalities etc associated with each of his loans. After being refused loans from a number of possible lenders and being faced with the possibilty of losing his family home, David was advised by a close friend to approach a debt consolidation specialist. Having looked at David’s loan particulars and record, the debt consolidation expert worked out the following deal for him:

Refinance all Davids loans into one facility.
Loan: $254,000

Repayment: $2438

David reduced his outgoings by nearly $1000 per month, but best of all now has all the lenders off his back. He is now able to put the past in the past and move forward.

Debt Consolidation Loans are saving various families like David’s from losing everything they have worked hard for. It is hence imerative that if you are in a similar situation to know how a Debt Consolidation Loan could help you. Consult a Debt Consolidation specialist to get expert guidance on consolidating all your debts into one single debt for your future financial well being.

Contact Us for more information on Debt consolidation - The Facts

A lot of us have heard the words Debt Consolidation but are confused about what they mean exactly and how a Debt Consoludation Loan might help. In today’s world, with many of us struggling with paying high interest rates on our debts, such as mortgages, credit card, store cards, car leases and various other kinds of loans, it just takes one unexpected event in life like an illness or an accident for debts to start spiraling out of control and put extreme financial pressure on an individual and their family. Hence it is essential for you to know what your options are and how a Debt Consolidation Loan might be able to help, especially if your situation is so bad that it has had a negative affect on your credit rating.

So what is a Debt Consolidation Loan ? To put it simply, it’s a special type of loan that allows you to convert or consolidate all your loans into one single loan. It involves combining all your debts and loans, whether you are up-to-date with payments or not, into one loan with a lower overall monthly (or fortnightly) repayment. A common circumstance is if a person falls sick and cannot work leaving their not so important loans like credit cards go into default. Just defaulting for one or two months is bad enough but if you let these defaults run up to 3 or 4 months or above, it is nearly impossible to catch up. Once you are in this situation, your credit rating will be affected and most traditional lenders would most likely refuse to loan you money. Repayment history being the single most important factor in deciding lending or refinancing potential.

Let us take a real life example which could happen to anyone:

David was a fully employed office worker in his mid-thirties on a salary package which comfortably supported his day to day expenses and that of his family including his month mortage payments on the family’s home, car loans and minimum payments on his credit cards. Unexpectedly he developed a gall bladder problem which caused him to lose control of his bowels. Because of the nature of his condition, he was forced to take six months off work for treatment until he was fully recovered.

During this six month period with no income coming in, the family was forced to pay for their daily living expenses with credit cards. David was not in a position to pay his loans and defaulted on his mortgage and car loans.

His loans looked like the following:-

Mortgage: $202,000 at $1550pcm

Credit Card: $22,000 at $660pcm – Also in default with debt agreement to pay $10,000 to close account.

Car Loan 1: $13,000 at $390pcm (3 months behind)

Car Loan 2: $29,000 at $900pcm (3 months behind)

The critical things to consider in this situation were:

• Bank was ready to foreclose on his home and both car loans
• Credit card company was willing to take 10k to close the account.
• Home Value: $330,000
• Total Loans: $ 254,000
• Current repayments: $3500

Upon his recovery, David assessed his situation and realised that it was impossible for him to try and pay off all his defaulted loan repayments, credit cards as well as interest and penalities etc associated with each of his loans. After being refused loans from a number of possible lenders and being faced with the possibilty of losing his family home, David was advised by a close friend to approach a debt consolidation specialist.

Having looked at David’s loan particulars and record, the debt consolidation expert worked out the following deal for him:

Refinance all Davids loans into one facility.

Loan: $254,000

Repayment: $2438

David reduced his outgoings by nearly $1000 per month, but best of all now has all the lenders off his back. He is now able to put the past in the past and move forward.

Debt Consolidation Loans are saving various families like David’s from losing everything they have worked hard for. It is hence imperative that if you are in a similar situation to know how a Debt Consolidation Loan could help you. Consult a Debt Consolidation specialist to get expert guidance on consolidating all your debts into one single debt for your future financial well being. For more information see Debt Consolidation Loan Example

Contact Us for more information on Debt Consolidation or see blog articles for more information.