Going from strength to strength

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There were 1,945 new second charge agreements in January this year, up 18% year-on-year, the Finance and Leasing Association (FLA) has found.

In the three months to January there were 6,015 new second charge agreements, up 18% from the previous year. In the 12 months to January there was 23,829 new agreements, up 8% year-on-year.

The value of new second charge business was £85m in January 12% more than the year before and £264m of new business in the three months to January, up 13% year-on-year.

The second charge mortgage market has made an impressive start to 2019, with new business up 12% by value and 18% by volume in January, compared with the same month in 2018. This is a strong performance, and as most of the market is broker-introduced, it also suggests that knowledge of second charge mortgages among clients is growing very quickly.

One of the big appeals of a second charge loan is the costs and speed of completion. On average a second charge loan is completed within 15 working days, this does of course vary dependant on the complexity.

There is little doubt second charge lending has just 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 qualified independent advisers who will be happy to help.

 

 

 

Second charge range growing

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There Is little doubt that second charge lending popularity is increasing on a daily basis. Second charge mortgages have increased this year month on month and continue to do so as more people become aware of just how advantageous they can be.

This type of lending is so easy and quick to secure lenders are increasing their portfolios at a rapid rate. An average case presented will complete in approximately 14-21 working days, as you can see this is so much quicker than the standard re-mortgage.

Different lending plans are emerging daily and this can only be good news for the borrower. Interest rates and fees have reduced considerably as well as lenders see this market as a growth area in the long term.

The biggest growth area of loans is to the self-employed and the good news is there are many different plans to suit each individual case. Loans can be fixed for various terms which can give peace of mind or you may wish to just take the standard variable rate.

This is a rapidly expanding area of lending and products are increasing to match the demand. It is vitally important you research the market to get the best plan to meet your needs not only now but in the future.

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 correct deal 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 you achieve the correct loan for you.

 

 

Economic uncertainty drives second charge market

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Increases 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 8.9% 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, reports show a 9.2% increase in re-mortgage applications in January 2019 compared to the same period last year. This is reinforced by the ONS reporting in their December House Price Index that the rate of increase in UK house prices is 2.1%, 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.

If you are looking to raise funds it’s important to consider a second charge as a solution for a refinancing or home improvement.

Like too know more?

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

 

 

 

Average borrowing increases

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According to figures from the Finance and Leasing Association (FLA), the average second charge loan size has increased from around £25k ten years ago to around £45k now.

The loan-to-value of around 60-65% on a second charge loan hasn’t changed much over the last ten years though, so it is higher property values which have enabled the loan size increase.

Average repayment terms requested at the outset are around 15 years, although most will probably redeem within about four to five, and two thirds request a fixed rate product giving them surety of their repayments for the fixed period – important when Base Rate is expected to rise further in that period. Even with a fixed rate, having no early repayment charges means the borrower can refinance whenever circumstances suit, without penalty.

Re-mortgage v Second charge

So, why would one opt to take the second charge route rather than re-mortgage?

Lots of reasons actually. For example, many customers have a really good first mortgage deal, maybe a great fixed or tracker rate that they don’t want to give up. Taking a second charge at a higher rate may mean that the blended rate across the whole debt is still lower than a new first deal; so a second charge loan can make good financial sense.

Some borrowers may face a stiff early repayment charge on their first mortgage if they re-mortgage totally. Others may have had a change in their circumstances which means switching to a bigger first charge mortgage is not an option. Perhaps they started a family or changed jobs resulting in a different source of income. Let’s not forget, second charges can be considerably quicker to complete than re-mortgages.

Like to know more?

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

Second charge lending increasing momentum

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The number of loan applications increased by nearly 23% in the quarter ending December 2018 compared to the Q3 ending September 2018. This year has continued on the upward trend as consumers become more aware of how a second charge loan could benefit them.

It would seem the UK homeowners are very keen to reduce expensive debt (credit cards and un-secured loans) so as to free up monthly funds.

Benefits of second charge lending?

  • Faster to complete than a traditional re-mortgage.
  • Normally less fees.
  • Very attractive interest rates.
  • Loans are very flexible.
  • Ability to retain current mortgage deal if on a low rate.
  • Self-employed and contract workers

Choosing a lender

There are an increasing number of second charge lenders entering the market and choosing one can be a minefield, getting professional independent help selecting is highly recommended.

A broker will take time to understand your needs and be able to place your application with the lender matching your requirements. This is vital as selecting the wrong loan or lender could be very expensive in the long term.

Like too 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.