Debt Consolidation refinance of your mortgage can lower your monthly loan repayments and reduce mortgage stress for borrowers with multiple loans.
Mortgage stress in Australia has highlighted the need for Aussie home borrowers to consolidate their mortgage, credit card debt, store cards, personal loan and and car finance into one loan. Aussie home owners looking to refinance and consolidate debt comprise between 11% and 15% of all finance applications in Australia in any given month.
If you have equity in your own property to borrow against it may be possible to use debt consolidation to reduce your collective payments by as much as 50%. Home Loan Interest rates have never been as high as the 20% plus rate charged by some store accounts and credit cards, so a loan consolidation refinance to your home loan mortgage may help you regain control of your finances.
The key is to have sufficient lvr or equity in your home to cover the additional borrowings. It is this equity that provides your lender with security over the extra loans being folded into your mortgage.
For people lacking in financial discipline, debt consolidation, while a very effective risk management strategy, is only part of the solution to their problems. The root cause of the initial problem also needs to be addressed or debt can still spiral out of control.
Get rid of your Credit Cards. Cut them up and close the accounts, or live to regret it! Major Banks and other major lenders in Australia love to hand out Credit Cards, and if you already have one, they try to get you to increase the limit. Don’t do it!
Start saving a Cash nest egg either in a mortgage offset account or high paying at call account for emergencies. Increase the repayment amount on your home loan so the non housing components are paid off as per their original schedule or sooner. Keep your home loan mortgage lender honest! Get some mortgage statement checking software. Speak to a reputable mortage broker about a refinance consolidation home loan if you are finding it hard to meet your monthly loan commitments.