Why are second charges growing so quickly?

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In these very active times of financing it has become more important to be able to complete a deal on time. Second charge finance is growing in status year on year and is going from strength to strength, delivering funding quickly and efficiently. This is something high street banks and mortgage companies just cannot do on a regular basis.

A recent survey of borrowers clearly shows the most important ingredient in funding a deal is speed of completion and efficiency. The survey showed that traditional lenders are just taking far too long to get funds released and deals falter due to this reason. A new second charge loan can be completed within 25 working days which as we all know is far quicker than any re-mortgage.

One client interviewed said “I have just recently completed on a second charge loan and from start to finish it only took 17 days”. “I would have no hesitation to recommend this type of funding, just make sure you explore all options open to you before committing”.

Second charges offer

  • Fast completion.
  • Flexible repayment options.
  • No exit penalties for early re-payment.
  • Very competitive rates of interest.

Need help?

If you wish to raise funds and need clarity of what can be done call us now and we will be very happy to talk things over.

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Second charges moving forward month on month…

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The second charge mortgage market saw a rise in volume and value in May – making it the third consecutive month of growth, according to the Finance and Leasing Association. The value of the second charge market was £88 million in May, up 27% on the previous year.

There were over 1800 new second charge mortgages taken out in the month of May, a rise of 30% on the previous year. Second charge mortgages allow you to borrow a lump sum which you repay alongside your existing mortgage over a fixed term. Many people use them to raise money as an alternative to a re-mortgage.

Second charge mortgage new business has ebbed and flowed over the past year, which was to be expected following the significant changes brought about by the market’s transfer into MCOB in March 2016 plus the Brexit vote. Customers are borrowing for a wide range of reasons, including renovating or extending their current property.

The value of second charge business was over £900 million in the year to May.

Despite the ongoing political and economic uncertainty – a result of the snap general election and Brexit vote – it’s encouraging to see the market continue to grow.

The second charge market has come a long way over the last 5 years and now is seen as a very serious alternative to a standard re-mortgage. The product range has increased significantly and now caters for the majority of needs.

Help needed?

If you are looking to raise a secured loan please do get in contact and one of our advisers will be happy to guide you.

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Rise in business continues to be consistent

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The Finance & Leasing Association (FLA) has revealed its members new business figures for the second charge mortgage market in May 2017.

During the month, £87m of second charge new business was completed, up 26% year-on-year. For the year to the end of May, £259m has been transacted, at 25% rise on the same period last year.

Second charge new business has ebbed and flowed over the past year, which was to be expected following the significant changes brought about by the market’s transfer into MCOB in March 2016. While the market is still in the bedding-in process, in the first five months of 2017 new business was up 12% by value and 9% by volume.

These figures go to prove the benefits and changes are filtering through to the homeowner, and they are borrowing for a wide range of reasons, including renovating or extending existing properties.

Consumer confidence remained robust in May, and another consecutive month of increased lending is a positive indication that the second charge market is in good shape. Despite the ongoing political and economic uncertainty – a result of the snap General Election and Brexit vote – it’s encouraging to see the market return to the levels seen before the Mortgage Credit Directive implementation.

Can we help?

If you are looking to raise capital from the equity within your property please do get in contact and one of our qualified advisers will be happy to help.

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Second charge mortgage, what is it?

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Second charge mortgages are becoming increasingly popular with the number of people opting for one at its highest level since 2009. They are also referred to as secured loans. This is because the loan is secured on the property thus making the interest rate cheaper than an un-secured loan.

Second charge loans allow you to borrow a lump sum which you repay alongside your existing mortgage over a fixed term. Many people use them to raise money as an alternative to a re-mortgage.

First charge mortgages are also secured loans for exactly the same reason – it’s just that they are traditionally referred to as a mortgage.

What can I use a second charge mortgage for?

You can use them for a number of purposes without affecting your normal mortgage. A second charge mortgage is extremely helpful if you are struggling to get a personal loan, maybe because you are self-employed.

If you are looking to re-mortgage a second charge mortgage might be cheaper if your mortgage has a high early repayment charge, or you have a particular product you don’t want to lose i.e. fixed rate, discounted rate etc.

Lots of people also use them to fund home improvements and add value to their property.

How do you qualify?

To qualify for a second charge mortgage, you must be a home owner, although you don’t necessarily have to be living there. While a first charge mortgage is based on a number of factors, including your deposit, credit score and ability to pay each month, a second charge mortgage is based on the equity available in your property.

Need to know more?

If you require more information about raising a secured loan please make contact and one of our advisers will be happy to help.

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Is it now time to act?

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Second charge loans are growing in stature time on time as more homeowners become aware of their vast array of uses.

Recent house price figures are showing a continued increase in property values which is great news for homeowners indeed. With property values increasing this in turn means more free equity within the property to raise capital.

There is a lot of talk within the industry that mortgage interest rates are about to increase and experts are showing concerns homeowners are not ready for this jump. If a rate rise is coming then this will also filter through to the second charge market in due course.

So, if you are looking to raise capital on your properties equity now would be a very good time to start so as to avoid any nasty surprises. A second charge loan has very few restrictions and will complete much quicker than any re-mortgage.

The good news is there are still plenty of advantageous fixed rate second charge loans available but this could change very quickly in these uncertain times.

It is not always best advice to use a second charge loan to raise funds and you should always discuss your needs with a qualified adviser. A wrong move when raising capital can be costly in the long term so please do seek advice.

Like too know more?

Our advisers are fully trained and qualified in all areas finance so please do call us to discuss any requirements you may have.

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