Our clients were facing significant financial strain due to unexpected circumstances. The husband, a self-employed carpenter in his early 70s, fell ill during the COVID-19 pandemic, which left him unable to work for a period. The wife, 12 years younger, works part-time at Tesco, balance work with household responsibilities.
During the husband’s illness and the subsequent cost-of-living increases, the couple relied heavily on credit to cover their expenses, resulting in unsecured debts that become overwhelming. He was keen to retire, but they found themselves stuck and unable to see a way out of their financial predicament.
Their existing mortgage balance was £24,000 with just three years remaining. However, alongside their unsecured debts, they were paying a staggering £1,798 per month, leaving them with little room for household bills or extra spending.
Our Solution
Understanding their desire to reduce financial pressure and for the husband to retire comfortably, we worked with our clients to explore debt consolidation options. By rolling their debts into a manageable mortgage, we aimed to reduce their monthly outgoings and provide a clear path toward financial freedom.
After carefully assessing the client’s circumstances, we secured a mainstream mortgage with Halifax that combined their existing mortgage and unsecured debts. This solution extended the term to 8 years, creating affordable monthly payments of £660. We made the clients aware that in doing this, the benefit would be that their monthly outgoings would be reduced but that restructuring the debt over a longer term, may mean the overall cost is higher due to additional interest. They were happy to accept this though as their priority was to reduce outgoings now.
How this helped our clients
The new mortgage arrangement resulted in a saving of £1,138 per month, significantly improving their immediate financial wellbeing.
With lower monthly payments:
- Other than the new mortgage, the husband was able to retire free of unsecured debts allowing him to focus on his wellbeing.
- The mortgage is affordable on the wife’s part-time income and the husband’s pensions, ensuring they have financial stability.
Making these changes has given the clients breathing space that they desperately needed, allowing them to enjoy their retirement years.
Debt consolidation can be a powerful tool for those feeling overwhelmed by monthly repayments in the here and now. Understanding the implications as well as the benefits though is key. By combining debts into a single, affordable payment, we helped our clients regain control of their finances and achieve their retirement goals while ensuring they understood that the overall cost of borrowing would likely be higher due to additional interest over a longer term being payable.
If you are struggling with debts or want to explore your options, please get in touch to discuss how we can help you secure a more stable financial future.
*Please note: Think carefully before securing other debts onto your mortgage. Your home maybe repossessed if you do not keep up repayment on your mortgage.