What benefits can I get by consolidating my debts in my home loan?

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Eureka
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Joined: Thu Sep 13, 2018 2:13 pm

What benefits can I get by consolidating my debts in my home loan?

Postby Eureka » Thu Sep 13, 2018 2:34 pm

Hi Home Loan Experts.

I have a couple of credit cards with ANZ $10,000 and HSBC $8,000. I have a home loan with CBA with $490,000 owing. I always find it hard to repay my credit cards (missed them a few times) and one of my friends suggested to me to consolidate all those debts on my home loan. I also think it’s a brilliant idea.

Could you advise me how do we go about consolidating debt into our home loan and why would we do it? Can you give me some of the significant benefits of a debt consolidation home loan?

Thank you in advance.

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Otto Dargan
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Re: What benefits can I get by consolidating my debts in my home loan?

Postby Otto Dargan » Thu Sep 13, 2018 3:28 pm

Hi Eureka, Welcome to the forum.

Yes, you can consolidate your other debts in your current home loan if you meet the following criteria:
  • On time home loan repayments for the past six months.
  • On time credit card and personal loan repayments for the past three months.
  • No missed repayments on any credit facility with the bank that you are applying with.
The main benefit of a debt consolidation home loan is that your repayments are much lower.

A car loan or personal loan will have a short-term, and credit cards have high rates, so your repayments are comparatively higher even though you're not borrowing as much as a mortgage.

Home loans have a lower rate and a longer term so the repayments are much lower.

A debt consolidation loan provides many advantages including:
  • Making affordable repayments by paying a lower interest rate.
  • Managing your debts more effectively as only a single combined payment needs to be made.
  • Preventing creditors from pursuing your funds.
  • Protecting against the risk of bankruptcy.
  • Improving your savings position and cash flow.
Lastly, you're going to feel much better.

If you're drowning in debt, then you'll be stressed out and it may affect the rest of your life. Rolling everything into one repayment each month lifts the weight off of your shoulders.

Please enquire online or call us on 1300 889 743 and explain your situation so we can help you get approved for a debt consolidation loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Eureka
Posts: 3
Joined: Thu Sep 13, 2018 2:13 pm

Re: What benefits can I get by consolidating my debts in my home loan?

Postby Eureka » Thu Sep 13, 2018 5:03 pm

Ok, sounds good to me. Can you let me know how much I can borrow? My property is valued at around $560,000.

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Otto Dargan
Mortgage Specialist
Posts: 7021
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: What benefits can I get by consolidating my debts in my home loan?

Postby Otto Dargan » Thu Sep 13, 2018 6:18 pm

Hi Eureka,

You can borrow up to:
  • 90% Loan To Value Ratio (LVR) if you have a clean credit file and all of your repayments have been on time.
  • 80% of the property value if you have missed payments but, overall, are repaying your debts.
  • 75% of the property value if you have serious credit impairment or you’re missing payments on all of your debts.
The key to approval is to prove to the bank your missed payments was a one-off event or those days are behind you.

This is particularly true with life events like losing your job or illness that prevents you from earning a normal income.

If you have had severe credit impairment, then you must prove that you can afford the new loan amount.

Speak with one of our credit specialists by calling us on 1300 889 743 or by completing our free online assessment form.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Eureka
Posts: 3
Joined: Thu Sep 13, 2018 2:13 pm

Re: What benefits can I get by consolidating my debts in my home loan?

Postby Eureka » Thu Sep 13, 2018 8:02 pm

Hi Otto, thanks for the information. I’ll email you guys my information and discuss with you further.


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