If you wish to reduce your outgoings in the new year, one way to achieve this is to raise your mortgage balance and with the additional funds available pay off any outstanding credit cards, personal loans or car finance. These often unsecured debts have higher rates of interest than your mortgage and are repaid over a shorter term and hence the monthly payments are usually much more.
Think carefully about whether a remortgage is right for you? Are you able to pay the debts off through other means? Or are you able to reorganise your finances by either a credit card balance transfer and renegotiate personal loan terms with the lender? The reason being a remortgage will often mean paying the debt off over a longer term which will often lead to a higher total to pay overall, short term gain for long term pain.
One way to overcome the ‘long term pain’ is to reduce your mortgage term and increase your monthly mortgage payments, you will need to consider closely what the right monthly payment for you should be as you need to balance short term and long term financial goals. By reducing your mortgage term you will reduce the total to pay and this can offset losses incurred by the debt consolidation exercise.
If this is confusing feel free to give me a call and lets discuss your financial situation and what you are looking to achieve. By emailing alternative financial solutions to you after discussion which you can compare, by seeing the differences in total cost between quotes it will become clear which way forward is right for you.
In the past many clients have chosen a solution which reduces their monthly outgoings immediately, but they also have one eye on the future and aim to pay down their debts by regular monthly overpayments which they can control. Ultimately we want you in control of your financial liabilities rather than the other way around. The majority of clients are happy if they feel they are making progress with the repayment of debt, and not going backwards.