Don't use mortgage to pay off car finance

Thu, 04 Oct 2007



An Irish government association has warned consumers not to take out new mortgages to pay off personal debt .

According to recent reports, large numbers of people are using new mortgages to pay off their car finance loans, their credit card bills and other outstanding debt. The figures show that many choose a remortgage despite climbing interest rates and some measure of international uncertainty in the financial markets.

Remortgaging to pay off debts is known as debt consolidation, and is growing in popularity. The Money Advice and Budgeting Service (MABS) has warned consumers to think very hard before taking this step.

Paying off a remortgage takes considerably longer than standard personal debt. MABS said that those remortgaging to pay off their car loans and other debts are taking the easy option.
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