Many people have other debts aside from their home loan. This may include personal loans, car finance or credit card debt. Often these other debts attract a much higher interest rate than what you are paying on your home loan.
As circumstances change, this can create financial pressure as all of these repayments drain cash reserves. Similarly, many people would rather consolidate all of their monthly repayments into one single repayment, making budgeting easier and helping with cash flow.
If you have equity in your home, debt consolidation may be an option for you. This is achieved by refinancing or increasing your current home loan to incorporate some (or all) of your other debts. This can often be achieved even if your credit history is not perfect – you may have been late with repayments or actually have accounts in arrears.
Costs are involved and these need to be offset against the benefit of consolidating. Whilst your monthly outgoing will decrease as a result (otherwise there is little benefit in doing so) as your home loan is generally over a much longer term than other liabilities, so the total amount repayable can increase.
Your UFSWA Mortgage Broker will be able to calculate the costs and benefits for you based on your personal situation, needs and budget.
Disclaimer: Loans are approved or declined on their merits by the specific lender and a loan approval is not guaranteed. We believe the information on this page to be correct. However we can give no warranty to this effect and expressly disclaim any liability for loss or damage by any person acting upon the information provided herein.