Loan to help you?

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For some borrowers, a second charge mortgage will be a better option than a re-mortgage, so it’s surprising that so many consumers are unaware of what they are and how they work.

There can be several reasons that a second charge might be the preferred option for your new loan. For example, you may not want to extend the term on your current mortgage or lose an excellent interest rate you currently have.

Demand for this kind of loan, particularly when it comes to funding home improvements or debt consolidation has increased substantially over the past 2 years. One thing which is very evident is that consumers have become very aware of just how much they are paying for any unsecured loans they may have.

The vast majority of high street banks and standard lenders still continue to show a reluctance to lend on a second charge basis leaving the door open for the specialist lenders. Second charge finance has provided an invaluable resource to those looking to secure finance for their projects quickly and cost-effectively.

These days there are some many loan options available to homeowners it is very important to get the correct one for your needs. Always seek professional advice before taking out any loan secured on a property you own.

Why choose a second charge loan?

  • Faster to complete than a traditional re-mortgage.
  • Very attractive interest rates.
  • Loans are very flexible.
  • Ability to retain current mortgage deal if on a low rate.
  • Helps the self-employed

Like to know more?

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

The rapid rise continues

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Second charge loans have risen in popularity over the last few years. Before the credit crunch second charge lending had a rather different image to the one portrayed today.

This outlook has changed significantly over the last few years with banks and payday lenders charging very high interest rates. The second charge sector has innovated and now is seen as a perfectly acceptable form of funding for the borrower in the short and longer term.

Whilst the industry has never been shy in blowing its own trumpet the latest figures from the trade body demonstrate that there is a great deal of substance behind the PR machine.

Brokers up and down the UK reported large increases in business in 2017 with loans being written well in excess of 2016.

This rapid growth has seen an injection of new lenders enter the market, together with a wider range of new specialized products to basically fit the majority of needs.

The clear majority of second charge loans are now used by homeowner families but now landlords are seeing this as a flexible option to main stream lending. This type of funding can be put in place without fuss and very quickly to meet the client’s needs. For the borrower second charges offer flexibility and used correctly can assist in generating the funds needed rapidly.

The future for second charge lending seems to be very bright for all those involved. There was always a gap in the market for loans that could be completed quickly and efficiently.

Find out more

As second charge lending has progressed more and more flexible products have been launched, if you would like to know more about this type of loan please call one of our fully qualified advisers.

Why is secured lending better?

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One reason you may wish to choose a second charge loan is that it’s likely to offer far better rates of interest as the loan is secured. Unsecured loans from high street banks and other sources can be notoriously expensive. Just check out the rates charged by the “pay day” lenders.

Secured loan – means the amount borrower is secured against a property giving the lender far less risk.

Unsecured loan – means the loan is free of any securities and therefore higher risk to the lender.

Secured lending is particularly useful for those who might find it difficult to obtain the loan required without security. Such groups of people may include the self-employed or those who have had past credit problems.

For many people wishing to raise funds the choice is between a second charge loan and re-mortgaging. There are several reasons a second charge loan may be preferable over a re-mortgage but there are two key very common factors.

-Your credit history has deteriorated since you took out your mortgage.

-You currently have a mortgage with penalties to change.

These two factors alone make a second charge deal an attractive way forward to securing the funds required.

Need some assistance?

If you think this type of loan could assist you in your future planning, it is very important to ensure you get the right one to suit you. There are many different lenders offering numerous second charge loans so please do contact one of our advisers who will be happy to help you achieve the correct loan for you.

Expensive debt you want to clear?

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2017 saw a sharp rise in the number of homeowners looking to utilise a second charge loan to consolidate their expensive long-term unsecure debt.

This notable growth in the level of household debt, alongside record low rates on second charge products, are combining to boost demand for second charge loans.

2018 has seen the trend for second charge demand increase again as borrowers are shifting away from expensive shorter term unsecured loans. It would seem the so called “pay day” lenders are far less attractive to the homeowner due to the extremely high interest rates being charged.

A second charge loan will not suit all needs, debt consolidation is a very complex issue and needs to be researched to ensure the best deal is found. As an example, borrowers who are paying a low interest rate on their main mortgage, or they are within an early repayment charge period, a second charge mortgage can be the most sensible way to consolidate that expensive debt.

There are now more lower rate second charge products on the market than ever before due to lenders recognising the growth in this form of lending.

Lending these days is a very confusing area for most consumers with so many alternatives available. It is highly recommended that anyone considering taking out a new loan should seek professional advice as a mistake could prove very costly in the long run.

Can we help?

If you are considering taking out a secured loan, please do make contact and one of our fully qualified advisers will be happy to assist.

Second charge loans, a new era of lending

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The second charge loan market has recently been hitting the headlines revealing large increases in application and completion levels.

In years gone by the process of a second charge mortgage had been very different and proved very confusing to most homeowners. Borrowers clearly did not fully understand how a second charge loan worked or how to go about getting the correct information.

One of the factors behind the escalating growth of this sector is driven by the sky-high interest rates charged by the unsecured lending market. In light of the recent lending figures it is clear regulation of the seconds market has resulted in intermediaries considering second charge mortgages more closely as a practical solution to client’s needs.

MCD regulation has helped align second charges to the mainstream mortgage market and opened up more choices for the borrower. As a result, the division between first and second charge lending has become far narrower.

Resurgence of secured lending

Although regulation has been a contributing factor, it is felt within the industry that the commitment from the lenders to engage with the intermediaries will be instrumental in the long-term success. Because of this new found understanding more and more intermediaries/brokers have a deeper understanding of second charge lending and the potential benefits it offers clients. It is therefore little surprise that second charge lending has begun to see record levels of completed business.

The way forward

Second charge loans do not suit every need and it is vitally important any potential client seeks the correct advice from a professional qualified adviser. If you would like to know more please do not hesitate to contact us.