How a Debt Consolidation Mortgage Helped a Contractor Reclaim Financial Control

Customer Overview

A couple in their early 40s—one a full-time contractor operating via an umbrella company, and the other self-employed—based in the South of England recently sought financial assistance after being declined for a further advance by their current mortgage lender, Nationwide. With credit card debt looming, plus the desire to finance a home improvement and car purchase, they turned to our mortgage advisory team for help. Step One Finance debt consolidation was considered among the solutions.

Challenges Faced by the Customer

The couple faced several key challenges:

• Nationwide declined their further borrowing request, blocking an initial path to accessible funding.
• One partner had recently changed contracting structures from a limited company to an umbrella firm, making many lenders wary due to insufficient contract history.
• They needed to consolidate credit card debt of £4,882 into a more manageable single monthly payment, while also raising funds for a kitchen renovation and car purchase—approximately £35,000 in total.
• They required monthly payments to stay within a £350 budget, without sacrificing future flexibility.

The Debt Consolidation Remortgage Solution

After a thorough evaluation of the couple’s income, employment structure, credit profile, and financial goals, we recommended a debt consolidation mortgage via Step One Finance Limited. This Step One Finance debt consolidation offered a streamlined solution.

Key Mortgage Details:

• Lender: Step One Finance Limited
• Amount Borrowed: £40,000
• Term: 17 Years
• Initial Rate: 5-year fixed at 6.05%
• Monthly Payment: £352

Step One was selected because:

• They accept income from contractors employed via umbrella companies
• Affordability assessments were based solely on one partner’s income
• They accept a short employment history under the current arrangement
• No early repayment charge applies after year three

This structure offered the best fit, aligning with their three-year fixed mortgage timeline on the existing Nationwide deal—allowing flexibility to combine both mortgages in the near future.

Results Achieved

The recommended debt consolidation mortgage delivered several key benefits. With Step One Finance debt consolidation, they experienced:

• Monthly payment affordability: Fixed at £352, matching their budget requirements
• Debt Simplification: Consolidated nearly £5,000 of high-interest credit card debt
• Capital Access: Additional £35,113 raised for a new kitchen and car without using multiple credit facilities
• Financial Flexibility: No early repayment charge after 3 years enables potential remortgage or consolidation with their main mortgage

“After Nationwide turned us down, we weren’t sure what to do… Thanks to this solution, we’ve ended up with a realistic monthly payment and even got the funds we needed for our kitchen and car—all in one easy package.” – Anonymous Customer

Frequently Asked Questions

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

Monthly savings vary depending on the interest rate and term. In this case, the couple secured manageable payments of £352/month with Step One Finance debt consolidation, replacing higher card interest rates with a fixed mortgage rate.

Can you remortgage to fund home improvements?

Yes, remortgaging or taking a secured loan can be used to raise capital for renovations, like funding a new kitchen or bathroom.

Does remortgaging affect my credit score?

Initially, applying for a remortgage may affect your credit score due to credit searches. However, long-term benefits like reduced debt can positively influence your score if managed properly.

What documents are required for a remortgage application?

This varies by lender but usually includes: proof of income (payslips), ID, proof of address, and details of current credit commitments.

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

This depends on your agreement. In our case study, the chosen product allowed early repayment after three years without penalty, offering flexibility.

Take Control with a Tailored Mortgage Solution

If you’ve been turned down by your bank, are struggling with credit card repayments, or need to raise capital—our expert advisors can help you explore debt consolidation mortgage options suited to your unique situation.

We specialise in helping self-employed and contracting professionals find smart, flexible solutions using steps like Step One Finance debt consolidation.

Contact us today to discover how we can help you streamline your finances and secure your goals with confidence.