Very sound performance

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The latest numbers from the finance and leasing association reveal that second charge mortgage business volumes grew in November and December 2018 when measured on an annual basis.

There were 3,782 new agreements in the month, up by 21% compared to the same months last year.

This brought the total number of agreements in the 12 months in December to 24,724, 6.8% growth overall.

The value of new business in November 2018 alone came to £99m, a fall of 4.8% compared to the previous month’s £104m of new business, but when looked at on a yearly basis, an increase of 21%.

In the year to December 2018, £1.08bn of second charge business was completed, a yearly increase of 4.7%.

The market has reported a relatively strong performance in recent months following a steady first half of 2018.  The second charge mortgage market is likely to report solid single-digit new business volumes growth in 2019 overall as this form of lending increases in popularity.

Optimistic

The market is cautiously optimistic that this increase will continue this fiscal year, but it is important that brokers and homeowners are aware of the range of specialist financing options on offer.

A second mortgage continues to be a useful option for customers seeking to raise additional funds without wanting to change their existing mortgage. To find out more you should always contact a professional adviser as the options available are vast and varied.

Can we help?

If you are looking to raise funds secured on your property please do make contact and one of our advisers will be happy to help.

 

 

Raising a loan – Self-employed

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It has always been more difficult for self-employed people to get a mortgage compared to salaried employees. For that matter, 2nd charge loans have historically been somewhat harder to obtain for the self-employed as well.

At the heart of the issue is a tendency among self-employed individuals to not be able to satisfy loan companies looking to placate their own fears that the borrower will not be able to make good on his or her loan. The good news is that things are changing – at least where second charge loans are concerned.

Second charge lenders can do a lot more to help the self-employed than primary mortgage lenders because they have much more flexibility. They are finally taking advantage of that flexibility to find ways to better serve self-employed borrowers. Even more encouraging is the fact that lenders are coming up with many more specialised products.

The self-employed when borrowing money have always been limited to the choice of loan available, but this is changing all the time. It is highly recommended to get expert advice as the loans available vary in so many ways and it is important to get the correct one for your needs in the long term.

Lenders are changing the way they do business in order to better serve self-employed applicants. For example, one specialist lender indicated that it had reduced its tax calculation requirements while others are changing their income criteria to make it easier for borrowers to document their income.

Need help?

If you would like to know more please do make contact and one of our advisers will be happy to assist.

 

 

Second charge loans gain momentum

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Several lenders have claimed an increase in the second charge loan market suggests economic uncertainty is causing more people to improve their current property rather than move.

Data shows there has been an 8.4% increase in people applying for second charge finance in the second half of 2018, when compared to the same time in 2017.

Figures also show that 51% of these second charges were applied for to make home improvements.

In addition, UK Finance has reported a 9.2% increase in re-mortgage applications in November compared to the same period last year. This is reinforced by the ONS reporting in their October House Price Index that the rate of increase in UK house prices is 3.1%, the lowest UK annual rate since August 2013.

With an increase in re-mortgage applications, slump in the UK housing market and uncertainty around our economy, this could suggest more people are choosing to improve their current properties – rather than take a potential financial risk of moving.

It could be that Brexit worries are flattening the property market, meaning fewer people are moving and more homeowners are making improvements to their current properties rather than move during a time when it is still unclear how Brexit will affect property prices.

Growth in the market reinforces the fact there are plenty of opportunities in the current climate for second charges. It’s important to consider seconds as a solution for a refinancing or home improvement rather than just re-mortgage. Key to this is to get professional assistance as borrowing money these days offers so many options and can be very confusing.

Help required

If you are looking to take out a new loan please do make contact and one of our advisers will be happy to assist.