How much of a debt can I consolidate into my mortgage?

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Topeka
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Joined: Fri Sep 13, 2019 7:32 pm

How much of a debt can I consolidate into my mortgage?

Postby Topeka » Fri Sep 13, 2019 7:35 pm

I am looking to refinance, currently have $380k owing and looking to borrow more to pay off $25k in car and personal loans. Property is valued at 700k. Credit history is ok, except for a few late payments. My husband and I have a joint income of $180k. I need to refinance to consolidate my debts. How much of my debt can I consolidate into my mortgage?

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Otto Dargan
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Re: How much of a debt can I consolidate into my mortgage?

Postby Otto Dargan » Fri Sep 13, 2019 7:47 pm

Hello Topeka.

Thank you for reaching out to us and welcome to the forums.

Refinancing for debt consolidation might be a good option if you're struggling with making payments. How it works is that you will be taking all your debts and rolling them into your mortgage, making it easier to manage your finances.

Depending on your situation, you might be able to borrow:
  • Up to 90% of the property value is you have a clean credit history and all your repayments have been paid on time.
  • Up to 80% of the property value if you have missed payments, but you need to show that you have repayments have been consistent for the last 6 months.
  • Up to 75% of the property value if your borrowing power is limited and you have serious credit impairment.
Note that some lenders might decline to refinance if you do not have enough equity in your property.
Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for refinancing.

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

Topeka
Posts: 3
Joined: Fri Sep 13, 2019 7:32 pm

Re: How much of a debt can I consolidate into my mortgage?

Postby Topeka » Fri Sep 13, 2019 7:54 pm

Thanks for the help. If I do move forward with refinancing, what are some things I should be aware of?

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Otto Dargan
Mortgage Specialist
Posts: 7698
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: How much of a debt can I consolidate into my mortgage?

Postby Otto Dargan » Fri Sep 13, 2019 8:03 pm

Hi Topeka,

When looking into refinancing to consolidate debts, you should be aware of the following factors:
  • Make sure to cross-check the interest rates of the old and new home loans, as the interest rate will indicate what your repayments will be. You'll also need to decide on whether you want to go for a fixed or variable rate.
  • Be wary of the loan term on your personal debt. If the loan term stretches for a longer time, then you might end up paying more interest.
  • Annual and service fees will add up during the life of your loan.
  • If you are borrowing above 80% of property value, then Lenders Mortgage Insurance is applicable.
Refinancing is the same as applying for a loan, so you will need to have all your loan documents ready. Once you've submitted your application, the lender might need torevalue your property. After which, the lender will submit a discharge form to close the old mortgage account. You'll start paying for the new loan usually after a month after settlement.

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

Topeka
Posts: 3
Joined: Fri Sep 13, 2019 7:32 pm

Re: How much of a debt can I consolidate into my mortgage?

Postby Topeka » Fri Sep 13, 2019 8:04 pm

Hi, is a property valuation necessary? I’m worried that the valuation might come off short and I will not be able to refinance.

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Otto Dargan
Mortgage Specialist
Posts: 7698
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: How much of a debt can I consolidate into my mortgage?

Postby Otto Dargan » Fri Sep 13, 2019 8:11 pm

Hi Topeka,

Yes, some lenders do request a property revaluation as a safeguard against borrowers who might default.

If you feel like the property valuation has come up short, you can challenge the valuation. However, make sure to understand why the valuation came low as the success rate for a successful valuation is only 5%

We can order a free desktop valuation for you once you’re ready to proceed and we might also be able to get you a free upfront valuation from our lenders, but this is on a case by case basis.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for refinancing.

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


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