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Common reasons for consolidating other debts into your mortgage
By consolidating all your debts with higher interest rates into your mortgage this will reduce your monthly outgoings.
With house prices rising significantly over previous years the equity in your house has increased, this is the amount that your house value has increased compared to the mortgage owed.
Remove credit card debt, loans and other finance from your monthly outgoings. Technically you aren't clearing your debts you are moving them to your mortgage
Risks to consolidating other debts into your mortgage
Although your monthly outgoings have reduced you are extending your debt over a longer period of time and may end up paying more over the term of the mortgage.
Using the equity in your home and utilising the capital built up reduce your outgoings, but once the equity has been used the loan to value in your home will have increased.
Removing your debt and reducing your monthly payments is great but if you follow the same spending behaviours you could end up in the same situation again with no equity in your home to ustilse again.
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