A debt consolidation guarantee is a type of security guarantee where the borrowers consumer debts such as credit cards, personal loans, car loans and other debts that are being repaid by the home loan. The guarantor provides their home as additional security so that the lender will consolidate these debts into your home loan, therefore significantly reducing the interest that you pay.

Purchase & debt consolidation

Many first home buyers have credit card debt and other personal debts at the time they buy their first home. Rather than taking on a home loan as well and then trying to juggle their commitments it makes more sense to roll all of their debts into one loan and borrow 100% or more of the purchase price to do this.

The problem is that banks are reluctant to lend more than 100% of the purchase price. As a result the only way to do this is with the help of a guarantor who is happy to provide their property as additional security.

Refinance & debt consolidation

We commonly hear of people who would like to combine their debts into one repayment with their existing mortgage, however get declined for their loan because they have insufficient equity in their property.

With the help of a guarantor you can refinance your debts into one easy payment and avoid paying Lenders Mortgage Insurance (LMI). Note that only a few select lenders offer this style of loans to people who are refinancing.

Find out more…

Please enquire online or call us and one of our mortgage brokers will work out if you are eligible for a debt consolidation guarantor loan. Generally they are only available to people who have made all their repayments on time with their current loans and have a strong income to make future repayments.