Consider all other options before taking out a bad debt remortgage. You should ask yourself a few questions to determine what will work best for your situation. Can I reduce my payments through consumer credit counseling without taking out a loan? Will creditors settle debts for less than what I owe? Where can I get credit report advice, so I will know how paying off old debt may affect my credit score?
There are several different professionals like mortgage brokers, debt settlement companies, and consumer credit counselors that can help you find answers to the above questions. Friends or co-workers might be a good that have had debt problems may be able to refer you to a good debt professional.
Even if you have a lot of equity or own your home free and clear, most banks will not do this type of home loan. You may have to look for a private lender or hard money mortgage broker that has access to private lenders. If your credit is still good you might be able to get a debt consolidation loan that does not require a mortgage on your home. When you borrow against your home if you do not make the payments, you could lose your home.
If you are able to get a lump sum debt settlement you could cut what you owe in half by getting a home loan to settle your bad debts. Keep in mind that paying off old debts can reduce your credit score.
When you have tax liens or real estate taxes that have to be paid off to avoid the forced sale of your home, a private lender may be your only option. If this is the case refinancing, borrowing money from relatives, or a retirement plan are always a good idea to keep from loosing your home. Many borrowers get out of debt, improve their cash flow, and then run them right back up again. Be careful that once your are out of debt you regulate your spending and set up a reserve account for emergencies.
