Remortgage to Clear Debt and Fund Home Improvements: A Real Client Success Story

Client Overview

This case study showcases a married couple in their early 40s residing in Southern England. One partner works in public services while the other manages a small business. Having used financing previously arranged through Deal Direct, they returned seeking assistance with a new financial goal: consolidating debts and accessing funds for much-needed home renovations, considering a debt consolidation remortgage.

The Challenge: Consolidating Debt and Funding Renovations with Limitations

The couple faced significant financial pressure stemming from overlapping debts, including a secured loan that couldn’t be extended by the current lender (Step One) due to its loan-to-value (LTV) restrictions. Their priorities included:

• Consolidating over £58,000 of existing loan debt
• Raising an additional £52,000 for ongoing home improvements
• Keeping monthly repayments within a £1,500 budget
• Finding a lender that could accommodate a high LTV of up to 97.5%
• Securing a 5-year fixed-term mortgage with no early repayment charges

The Solution: A Tailored Debt Consolidation Remortgage

After a detailed financial review and market research, Deal Direct recommended a secured loan mortgage through West One Secured Loans Ltd. This option provided the flexibility and affordability the couple needed to explore a Deal Direct debt consolidation remortgage.

• Mortgage Type: Secured remortgage (Capital & Interest repayment)
• Lender: West One Secured Loans Ltd
• Loan Amount: £111,000
• Term: 17 years and 6 months (210 months)
• Interest Rate: 5-year fixed rate at 10.44%

This specific product was chosen based on several advantages:

• Accepted higher LTV up to 97.5%, offering flexibility if the property valuation was lower than expected
• Monthly repayments estimated at £1,188.86, within their budget
• No early repayment charges, allowing flexibility to remortgage again in 5 years
• Option to add arrangement fees to the loan, minimizing upfront costs

Results: Simplified Finances, Renovation Funding, and Peace of Mind

The remortgage solution achieved all of the couple’s goals and exemplifies an effective Deal Direct debt consolidation remortgage strategy.

• Consolidated £58,079 in existing debts into one manageable monthly mortgage repayment
• Raised £52,921 for home improvements without needing multiple loans
• Secured predictable repayments with a 5-year fixed rate
• Stayed within their target monthly repayment budget

“This solution offered us the flexibility we needed, held the payments within our target, and gave us peace of mind that we could still overpay when ready.” — Happy Customer, Southern England

FAQs

How much can I save monthly by consolidating credit card debts into a mortgage?

By consolidating multiple debts into one mortgage, many clients reduce overall monthly outgoings significantly, often by hundreds of pounds when opting for a Deal Direct debt consolidation remortgage. However, the total cost over the term may increase due to interest applied over a longer period.

Can you remortgage to fund home improvements?

Yes, it’s common to remortgage or take out a secured loan to release equity for renovations. This avoids higher-interest personal loans or credit cards and spreads the cost affordably.

Does remortgaging affect my credit score?

Initially, a remortgage may cause a minor dip due to credit checks. However, consolidating debts can improve your score over time by reducing outstanding credit and improving repayment consistency. Utilising a Deal Direct debt consolidation remortgage can assist in this improvement.

What documents are required for a remortgage application?

You’ll typically need proof of income (payslips or accounts), ID documents, proof of existing debts (credit commitments), and property details (including estimated value).

Can I repay a fixed-rate mortgage early without penalties?

Typically, fixed-rate mortgages come with early repayment charges (ERCs). However, in this case, the product selected had no ERCs, offering flexibility to repay early or switch deals after 5 years.

Take Control of Your Finances Today

If you’re juggling multiple debts or looking to fund home improvements, remortgaging to consolidate debt could be your smart solution. Let the experts at Deal Direct help you explore competitive options tailored to your needs, including a Deal Direct debt consolidation remortgage.

Get a free consultation now and discover how much you could save and simplify your finances in the process.