So changing circumstances can adversely effect your ability to service the loan. It must also be realised that although you may wish to consolidate unsecured debt for example credit cards and loans you will be placing unsecured debt on to a secured loan.

A typical example might be where 95% of the mortgage consists of a secured loan on the property and the rest, the extra 30 % is an unsecured loan. The two amounts will normally be at the same rate which could be for example fixed or variable and both will run the same term. Some terms may stretch to 35 years long.

The advantage of a long term is to be able to have lower monthly repayments providing the mortgage is capital and repayment. However the downside would be the large amount of interest you will be paying to a lender over 35 years, the long term could possibly take the client passed their retirement date and servicing the loan should be considered. Ideally if you are able to make regular over payments along side your monthly mortgage payments or make large lump sum overpayments you will reduce the term of the loan and make saving on the total interest you will be paying back to the lender.

Advantage :

You may potentially purchase a home if you have no savings for a deposit and solicitors fees etc.

Disadvantages :

Higher interest rate

Few lenders offer a such mortgages so choice is limited

Not available as a Self Certification loan (self cert)

Not available to clients who have an adverse credit rating (bad credit)

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