As we start another new year, many brokers may find themselves facing a higher number of clients struggling to stay on top of debt repayments, as the impact of increased living costs bites and the post-Christmas lull begins to hit home.
For many people, the festive season can be a financially stressful time, particularly for those already on a tight budget or with existing levels of debt.
The new year can also act as a trigger for action, with borrowers resolving to finally get their finances under control in a more manageable form.
REMORTGAGING FOR DEBT CONSOLIDATION
For brokers working in the mortgage industry, helping clients find ways to manage their debt and get their finances under control can be challenging. This is even more important given the affordability issues many borrowers have faced in recent years.
Consolidating debt by remortgaging is a particularly useful financial strategy for homeowners looking to streamline their financial commitments and control their monthly outgoings.
By replacing their existing mortgage with a new, larger loan, borrowers can use the capital raised to pay off other high-interest debts through a single monthly payment. This can make repaying the money owed more manageable over the long term.
It can also make the cost of repaying debt more affordable, as the interest rate on a mortgage is often comparably lower than that of credit cards or personal loans.
Additionally, borrowers can align the debt with the term of the mortgage. While the debt may accrue more interest over the longer term, it can help reduce monthly repayments to a more manageable level.
FLEXIBLE AND ACCOMMODATING SOLUTIONS
As a lender dedicated to helping borrowers facing financial challenges, Mansfield Building Society is well-positioned to provide solutions to clients looking to consolidate debt—whether through our prime mortgage range or via our Versatility and Credit Repair mortgages.
Our proposition allows borrowers to remortgage up to a maximum of 85% LTV for debt consolidation purposes on our standard residential range, and up to the maximum product LTV for our Versatility and Credit Repair mortgages.
We can also accommodate interest-only mortgages where a viable repayment strategy is in place, helping to keep monthly repayments down. The capital raised can then be used to repay other debt, such as credit cards, personal loans, or school fees, consolidating these into a single, more manageable payment.
GETTING BACK ON THE PATH TO RECOVERY
One of the many benefits of Mansfield’s Versatility and Credit Repair products is that they can accommodate those with a poor credit history.
As these products are designed for borrowers with a history of credit challenges, Mansfield assesses each application individually. This enables us to understand the reasons behind the client’s outstanding debt and credit issues and work closely with the broker to find a solution tailored to their client’s needs.
We can accommodate defaults or rent arrears from over three months ago on Credit Repair products up to 70% LTV. We can even accept a missed mortgage or credit card payment within the last three months, provided payments are currently up to date.
If your client is looking to consolidate debt in the new year, raising capital by remortgaging could prove to be a useful tool in helping them better manage their debt. It can also be an effective way of supporting clients on their path to financial recovery.
