Many tenants who buy their rented council property under the Right To Buy scheme are unaware that if they have other debts, these can be paid off by taking a loan out against the equity in their property.
When Mr. H. from London bought his rented council house last year, he had other financial commitments that he was also paying off a hotch-potch of debts (credit cards, store cards etc) on which he was paying high interest charges.
Mr. H was unaware that, like many people who get a mortgage under the Right To Buy scheme, his property was worth much more than the mortgage he had on it (he paid 35,000 for his home and it was valued at 190,000).
Because he had all this equity in the property, Mr H. could have taken out a debt consolidation loan (which would be secured against his property) to clear his other debts, meaning hed be paying lower monthly repayments and lower interest charges. This is because a consolidation loan should reduce the amount of interest currently being charged on other debts.
Also, he would have been paying just one manageable monthly outgoing for the loan repayment as opposed to a myriad of monthly demands, which can have a...
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