Debt consolidation is defined as one or more debts (not associated with the transaction) to be fully or partially paid off with monies advanced from the mortgage. Note, none of the following are considered as debt consolidation (assuming there’re no other debts to be consolidated than those stated below):
- Remortgage
- Mortgage being redeemed on the property the customer is moving from
- Paying off a second charge associated with either the remortgage property or the property the customer is moving from
- Paying off an equity loan associated with either the remortgage property or the property the customer is moving from
Maximum LTV
We can consider remortgage capital raising applications for debt consolidation up to a maximum LTV of 80%. We do not have an upper limit on the balance of debts to be consolidated.
We will exclude debts being consolidated from the affordability assessment, unless either of the customers are considered to have an Impaired Credit History, or there is any history on the bureau of a previous consolidation event.
Debt consolidation cases may have additional underwriting requirements, or the debts considered on-going if we have concerns that the debts may not be paid off.
The capital raising amount must be equal to the balance of debts to be consolidated, other than accounting for amortisation.
If there is additional capital raising other than the debt consolidation, please discuss with your account manager – NOTE: the maximum 80% LTV will apply in all circumstances where there is any element of debt consolidation.