 | Should I consolidate all my existing debts into my current mortgage? |
Think carefully before rolling all your personal loans into your mortgage. Adding to your mortgage and then forgetting about it (because the interest rate is low) and taking 25 years to pay it off will actually cost you much much more. If you need evidence of this, visit the Calculator page about debt consolidation. There is also the temptation to spend again because it now appears you don't have any personal debt - it's on the mortgage but it's still debt to be repaid. People often think differently about their mortgage.
A different approach is to put all personal debt into one loan, then with this all in one central place aim to pay that off quickly as possible. Then cut up credit cards. Don't fall into the same trap again. By still having the debt but in one place and committed to paying it off you will see the benefits of your hard work in reducing the loan and with your new mindset will think carefully in future before taking on new credit. It's not a set and forget solution.
Once out of debt, break the cycle and don't fall back into old habits. If banks offer you credit cards, say no - you are in control of your destiny so stop blaming others and fix the situation for good.
Don't ever take money from your home loan for luxury items however tempting it may be, ensure you keep your home loan for what it is intended.
Now you have one consolidated loan seperate from your home loan, your priority should be to pay this off as quickly as possible. Pay at least the minimum amount due each month ensuring the loan doesn't increase in size and then slowly make adjustments in other areas so you can free up funds to pay more than the monthly minimum therefore reducing the balance more quickly.
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