Is it good idea to Remortgage to pay off debt?

charyl · Apprentice Joined: 04 Apr 2007 Posts: 6

Hello everybody. I would appreciate if you could help me with one issue that I have. Besides my remortgage, I have several smaller loans that I need to pay back. The mortgage is on a flat which is in a hot spot where prices rise each day. Now, is it good idea to remortgage to pay off debt? Thank you for your posts.

demetris · Apprentice Joined: 19 Oct 2004 Posts: 9

Hi there. Well, it seems that you are very lucky to have such a flat. What you could do is use your flat to release equity. How to do that? Well, if your flat’s worth was 150 000 pound, you could get a mortgage on, let’s say, 120 000. Since the price has increased, let’s say that you flat’s worth is now 200 000 pounds. Now you can get a remortgage of maximum 160 000 pounds and maybe even more. Therefore, you can use the extra money that you can get for your flat to pay off those smaller loans. Just be careful about one thing. You need to be able to pay back your remortgage. Otherwise, you will put yourself in a bad situation. That would be all from me. Take care!

ashleywatson · Apprentice Joined: 10 Feb 2011 Posts: 10

Yes.... remortgage can help you for the relief of debts. Remortgaging could potentially offer some relief as a debt solution for people experiencing a certain level of debt. If you have owned your property for some time, the chances are it could be worth more than your outstanding debt.