Frequently this is a question that arises when clients suddenly find that desirable home but are devastated when the bank says “no” to the finance required to complete the purchase. Often the “no” relates to a high level of short term debt.
For many people it is not difficult to raise short term finance company debt, after all most motor vehicles are now purchased with some form of hire purchase debt, and with a frequent lack of job security some of us find raising short term debt the only way of keeping our financial heads above water until we find a job again.
There are many forms of short term debt with a range of interest rates and loan terms. When the bank says “no” they might just be saying “get your short term debt sorted and then come back”
You see, that debt causing the problem is generally on short terms at high interest rates. But with careful planning frequently those loans with the various loan terms and high interest rates can be joined into one loan with a term and interest rate that reduces the repayment burden.
Often the lender who helps us with the short term debt consolidation (making all those loans into one manageable one), is the lender who will complete the process by also providing the necessary long term mortgage finance to get us into that home and so make that hill a little less steep to climb!
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