Popular Choice

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Second Charge Mortgages Gaining Popularity:

 

Up to four in ten re-mortgages or home owners seeking further advances in the UK could benefit from taking a second charge loan, it is claimed.

Secured lending specialists believe that a combination of record low rates in the second charge market and the sector’s strong growth since 2014 highlights the benefits for customers and the opportunities for brokers.

Customers who would potentially benefit include interest only borrowers, people facing early repayment charges, and people benefiting from lifetime trackers or low fixed rate mortgages.

Landlords could also be in line to benefit from increased competition in the buy to let second charge market leading to significant pricing reductions. All this makes second charge lending an attractive alternative to re-mortgaging. This will allow landlords to benefit from the increased equity within their current portfolios.

The second charge market is on course to lend in excess of 1bn this year. Lending has achieved year on year growth since 2012 against a background of a buoyant re-mortgage market.

Rates have dropped to all-time lows making the case for borrowers to take out a second charge loan without disturbing their existing mortgage arrangements.

Need help?

If you are considering taking out a new loan against your property please get in touch with one of our fully qualified advisers who will be happy to guide you.

 

Positive Moves

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So the Mortgage Credit Directive (MCD) has been implemented and the world is still spinning. Many extra hours were put in by lenders, brokers and intermediaries to implement IT changes and make policy amendments so that systems and processes could continue to run smoothly after the 21 March this year.
In almost every company this hard work has paid off. I always admire how well both lenders and intermediaries get to grips with change – no matter what is thrown at them.
In the case of the MCD, I think the changes, ultimately, have been a good thing and made for a smoother customer journey. We are already seeing a positive move within the sector as far as product innovation goes.
Increased awareness:

A key hope for the directive was that it would increase awareness among intermediaries of second charge mortgages, making them more mainstream. There is already evidence that increasing numbers of brokers and intermediaries are becoming aware of the value of second charges and the fact that they can be a much more cost-effective option than a
Re-mortgage or further advance.

Choosing a loan:

This is no easy task as there are so many different options open to the majority of applicants. Be sure you know how much you feel comfortable in repaying each month and seek professional advice as to the best loan to suit your needs. We have fully qualified advisers waiting who can assist you so please do get in contact.

Speed Is Important

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Second charge lending continues to grow in stature month on month as homeowners look for loans at affordable rates. Homeowners are becoming very aware of the costs associated with unsecured lending and the so called “pay day lenders”.
A recent survey taken from 1000 homeowners clearly shows speed of completion is a very key factor when taking out a new loan. Obviously the costs and interest rates were very high on the list of wants but speed was very important also.
One of the big appeals of a second charge loan is it meets all the surveys key facts such as costs and speed. On average a second charge loan is completed within 21 working days, this does of course vary dependant on the complexity. This financial year has also seen a significant reduction in set up costs plus interest rates are at the lowest ever recorded.
Lenders have seen their market share grow at a rapid rate. They have been quick to recognise the importance of speed in completing a deal as competition increases. One major lender commented “The last 12 months has seen huge changes within the second charge market with faster completions being a key factor to winning business”.
There is no doubt second charge lending has had its most successful year, the good thing is lenders have taken this on board and reacted positively to meet the challenges.
Need some assistance
If you think this type of loan could assist you with your future planning make sure you get the right one to suit your needs. There are many different lenders offering numerous second charge loans so please do call our advisers who will be happy to help.