How a Debt Consolidation Remortgage Helped Secure £50,000 for Home Improvements

Customer Overview

A married couple based in the South of England, both working professionals in their early 40s, recently explored mortgage options to manage escalating home improvement costs and existing debts.

The wife is a returning client who had previously arranged a mortgage and secured loan through our services. Facing budget overruns on a property renovation, the couple needed a financial solution that both consolidated debt and provided additional funds for ongoing work.

The Challenge: Misaligned Financing and Mounting Costs

The primary challenges faced by the couple included:

• Cost overruns on previous home improvement projects due to supply chain issues and inflation.
• Existing secured loan providers unwilling to accommodate higher loan-to-value (LTV) borrowing limits.
• The need to consolidate £86,072 worth of debt while also raising an additional £49,433 in capital.
• Desire for fixed payments without early repayment penalties, providing flexibility to pay off the loan early if needed.

All of this needed to be structured within a budget of approximately £1,500 per month, and to match the couple’s existing mortgage term of 17 years and 6 months.

Our Solution: A Tailored Debt Consolidation Remortgage

To meet the couple’s offering requirements and long-term financial strategy, we recommended a debt consolidation remortgage through West One Secured Loans Limited. This lender stood out for several reasons:

• Loan-to-value up to 97.5%, allowing for the required borrowing despite limited equity headroom.
• A 5-year fixed rate at 10.94%, aligning with their need for monthly cost certainty.
• No early repayment charges – giving them the flexibility to pay off the loan early once the main mortgage is due for remortgage.
• Ability to add arrangement fees into the total loan, reducing upfront costs.

The total consolidation and capital raise required was £138,000, structured across a 210-month (17.5-year) term to maintain affordability. The couple’s monthly payment started at £1,515.23, slightly above their original budget but manageable based on current income and future affordability planning.

Why This Product Was Ideal

Compared with alternatives from lenders such as Step One and Selina, West One offered:

• Better access to higher LTV ranges.
• Lower fixed rates.
• More borrower-friendly features like no early repayment charge and no legal/valuation fees.

Debt Consolidation Warning

Though the loan permitted consolidation of £86,072 in existing debt, it’s important to note that the couple was advised about the long-term cost implications. At 2.22 per £1 borrowed, their consolidated debt repayment over the loan term would total approximately £191,079.84. However, their choice to lock in a fixed rate with manageable monthly repayments aligned with their bigger financial picture.

Results Achieved

• Secured a loan of £138,000 within the desired monthly budget parameters.
• Consolidated over £86,000 in debt into manageable repayments.
• Raised nearly £50,000 in additional funds for home improvement projects.
• Eliminated the need for separate loan applications and lender negotiations.
• Aligned new loan term with existing mortgage for simplified future remortgage planning.

“It was such a relief to find a lender that matched our LTV needs and offered fixed payments without penalties. We’re finally back on track with our renovations and no longer juggling multiple repayments.”

Frequently Asked Questions (FAQs)

Can you remortgage to consolidate debt?

Yes, remortgaging to consolidate debt is a common way to combine multiple loans, credit cards, or finance plans into one manageable monthly mortgage payment. Just be aware that stretching shorter-term debts over a longer mortgage term can mean paying more interest in total.

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

That depends on your existing monthly repayments, the term of the loan, your mortgage rate, and the new mortgage product. In this client’s case, consolidating £86,000 helped reduce cash outflow into one consistent payment around £1,515 per month, but long-term interest is something to consider.

Can I remortgage to fund home improvements?

Yes. Remortgaging can allow homeowners to release equity or adjust their current mortgage to borrow extra for improvements. This case involved raising £49,433 alongside debt consolidation.

Does remortgaging affect my credit score?

Yes, applying for and accepting a remortgage may temporarily impact your credit score. Over time, responsibly managing the new mortgage will help your score recover.

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

Some lenders, like West One, offer fixed-rate mortgages without an early repayment charge. It’s crucial to review the lender’s specific terms or work with a mortgage adviser who can identify these rare options.

What documents are required for a remortgage application?

Standard documentation includes ID, proof of income (payslips or tax returns), existing mortgage details, credit checks, and bank statements. Additional documents may be required depending on the complexity of your financial situation.

Start Your Debt-Free Journey with Trusted Mortgage Advice

Whether you’re consolidating debt, funding renovations, or simply looking for more flexible mortgage terms, our team is here to help find the right product for your needs. Get in touch with Deal Direct today to start your free consultation and explore your remortgaging options without obligation.

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