Why choose second charge:

Second charge loans can be a real alternative to a re-mortgage. While every application needs to be considered on its own merits, the second charge industry has recently become far more competitive and attractive.

Why you should consider a second charge:

1. A) Keeping your existing low rate mortgage.

You may have a very low rate lifetime tracker first mortgage. Many lifetime trackers were sold a number of years ago with some lenders offering rates of 0.25% (or lower) above BBR. You may have explored the current market and it is not possible to re-mortgage to an equivalent or lower rate.

This is clearly a scenario where a second charge loan should be considered. For example, if you have a base rate tracker mortgage of 150k at a rate of 0.75% (0.25% above base rate) and want to raise £30k, it is more likely that a second charge loan is a better option than re-mortgaging.

1. B) Avoiding early repayment charges.

If you face high early redemption charges (ERC) on your first mortgage in the next 2 years.

Rather than re-mortgage and pay high (ERC’s), it may be beneficial for you to take out the required additional borrowing by way of a second charge loan. You can then consider a re-mortgage when the (ERC’s) no longer apply.

1. C) Further Advance is not available

You may have approached you existing first charge lender for a further advance, but have been unable to obtain the amount required.

The first charge lender may have declined a further advance for a number of reasons. Typically this might be due to insufficient income, adverse credit or simply because your first charge lender is no longer lending. Second charge lenders often have a different approach to assessing income and adverse credit. If a client is clearly benefiting from the loan and more importantly can afford the loan, lenders are prepared to look at individual applications on their own merits.  https://www.second-charge-loans.co.uk/contact/

 

 

Second charge on the up and rising: 

Second charge lending activity has seen a definite surge in recent months, driven by record low rates and rising house prices, which have encouraged homeowners to reconsider their finances. So much so, that the number of second charge loan transactions has risen to the highest level seen in over five years.

This highlights the level of motivation to raise capital at the moment, and our own figures back this up. Second charge lending is now a big part of the lending markets with more borrowers considering this type of loan as an alternative to a re-mortgage.  Indeed, additional figures from a survey revealed that 7.8% of homeowners in August and September this year applied for a secured loan against their property.

Since the Brexit result a pattern has emerged with homeowners looking to reduce expensive long term debt such as credit cards and unsecured lending. Homeowners are without doubt being more cautious as the immediate future is somewhat uncertain and they see reduced expenses as a major priority.

Second charge loans now have a vast array of choices so if you are considering a loan please ensure you get the right one to meet your needs both in the short and long term.

Can we help?

We have a large number of fully qualified advisers so please do make contact and we will endeavour to find the perfect solution for your needs. https://www.second-charge-loans.co.uk/contact/