Consolidating debt into home loan
For example, if you purchase a car you might structure the financing over five years, because at the end of the five years you may consider selling the car.” If you were to structure the financing for your car over 30 years, it means that if you sell the car in five years time, you’ll actually end up holding onto the debt for an additional 25 years – which dramatically increases the overall interest you’re paying for the car.“We recently had a client that came to us wanting to refinance their existing home loan, and they were looking to consolidate a credit card debt of ,500 and a car loan of ,000 at the same time,” Bartels says.He was previously a writer and publisher for home loans at Finder.Marc has a Bachelor of Communications (Journalism) from the University of Technology Sydney.Before you look at consolidating your credit card debts into your home loan and therefore extending the period in which you pay it off read our tips below on how to pay off your credit card.When it comes to consolidating your credit card debt into your home loan asking one of the big four banks will likely get a yes, a banking insider claims.Generally, the main reason people consolidate their debts is to reduce the amount of interest their paying.But many borrowers make the mistake of restructuring their new debt the wrong way, says Trent Bartels, director of “When homebuyers are looking to purchase a property, they’ll often finance their home loan over 30 Years.
I have people ringing me up a couple of times a week saying I need to roll some credit cards into my loan and tidy up the house,' he added for emphasis.
“Initially, their friends had advised them to consolidate the debt directly into their home loan when refinancing, which would have meant they were financing this debt over 30 years.
The advantage for our clients was that it reduced their overall monthly repayments substantially, as they only had one mortgage payment to make.
However, banks like NAB, ANZ, Commonwealth and Westpac said they were responsible lenders.
Australian Bankers' Association (ABA) chief executive Steven Munchenberg said cardholders could refuse the offers and insisted banks were only offering the extra cash to customers who could afford it.
The insider alleges that banks are pushing their staff to encourage customers to take on more debt despite them not being able to pay the debt back.