Debt consolidation for homeowners

If you have cash tied up in your home it could be a good way to consolidate your debts and reduce your monthly payments. By securing a debt against your home you may be able to get a lower interest rate than youre paying on unsecured debts like credit cards store cards and overdrafts.
As with any credit the amount of cash you can free up depends on your ability to repay. In this case since youre securing it against property it also depends on how much equity you own:
equity equals value of home minus amount you owe in mortgages / secured loans
The amount of equity in your home goes up when:
the value of your home goes up because house prices are rising or because youve improved your home and / or
the amount you owe goes down because youve paid off more of your mortgages / secured loans.
For example:
Say you bought a £100000 house a few years ago.
You put down a £30000 deposit and took out a £70000 mortgage so you owned £30000 of equity.
Since then the price has gone up by £40000 and youve paid off £10000 on the mortgage.
You now owe £60000 to the bank but since the house is now worth £140000 you own £80000 of equity.
You may be able to access that £80000 by taking out:
a Secured Loan big enough to pay off your unsecured debts or
a Remortgage a new mortgage thats big enough to pay off the first mortgage and your unsecured debts.