Re-assessing your finances in the New Year

The festive period can bring with it a great deal of financial stress; more so than at any other time of the year. So, when opening your bank or credit card statement in January, it may be the case that you are nearing or have exceeded your credit limit.

This often sparks an overall assessment of your financial position for the New Year ahead. It usually makes sense to clear existing expensive credit card and other unsecured loan debt. At the same time, you may also be considering raising additional finance for home improvements, a car purchase or (especially during these cold, grey days) a holiday.

Consolidation of existing debt, even with raising additional monies at the same time, can considerably reduce your monthly outgoings if the right solution is found.

Your first port of call is normally your existing bank or high street lender for a further advance, but your request will be declined if you do not meet the present underwriting requirements.

Your attention may then turn to re-mortgaging away from your current lender. This can of course be done, but in some instances a re-mortgage is not a viable option because of the following circumstances:

  • The existing mortgage is a low Base Rate Tracker on an Interest Only basis, and to re-mortgage would ultimately be more expensive on a monthly basis.
  • The existing mortgage is on a Fixed Rate and has punitive redemption penalties.
  • Since taking out the existing mortgage there has been some impaired credit registered against you.
  • You have a low credit score and will subsequently not pass a new lenders’ affordability criteria.

Taking into account the above, a ‘second charge’ mortgage may be a option. Second charge mortgages have secondary priority behind your main (or first charge) mortgage. They are a secured loan, which means they use the borrower’s home as security. This may be a viable option because:

  • Second charges are not as expensive as you may think, with rates available from as low as 4% and with the vast majority having no early redemption penalties.
  • A second charge can convert a re-mortgage decline into an accept because of differing underwriting criteria.
  • Second charge loans are available for people with an impaired credit history.
  • A second charge term can exceed the existing mortgage term and hence pass affordability criteria.
  • Speed is normally of the essence when raising additional finance – second charge loans can be completed in weeks.

Whilst the circumstances that lead to a request for financial assistance may be quite daunting , in most cases there are options available to help resolve your monetary situation.

For more information on how our sister company Beaufort Capital Solutions can help you, please contact Clive Willson on 07966 074195 or email:

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice, the precise amount will depend upon your circumstances.