When you’re trying to pay off debts, borrowing more money doesn’t seem like a sensible thing to do. Yet people will often tell you that getting a 0% interest credit card is an easy way to reduce payments. Borrowing can sometimes work, but if you get it wrong then you’re just going to put yourself in an even worse situation. If you’re struggling to pay off your debts and you’re considering borrowing money to clear them, this is everything you need to know.
Borrowing more money against the house and increasing your mortgage is a common way that people get extra cash when they need it, but is it sensible? The main reason that people do it is that the interest rate is likely to be lower than say another credit card. However, that doesn’t always mean it’s going to work out cheaper in the long run. The first thing to consider is that you’re putting your home at risk. If you can’t afford to make the repayments, your creditor can repossess your home. Adding to the mortgage just makes this more likely to happen. You also need to think about the increased payments; paying that extra money each month could easily complicate your budget and make you more likely to get into debt again in the future.