Second charge mortgages are becoming a progressively more competitive way for borrowers to raise funds on their existing property, and product innovation means that there are more ways for clients to access a second charge mortgage.

For example, a growing number of landlords are choosing to raise capital with a second charge on a buy-to-let property and there is a growing range of options for clients.

We are also seeing a rise in second charge mortgages that take an equitable charge on the property. With an equitable charge, the lender does not take a legal stake in the property, but instead is given the right for a judicial process of recovery, which means that an equitable charge can be used where the first charge lender declines their consent to a second charge being registered. It even means that equitable charge mortgages are available to clients who have bought their home using a Help to Buy loan.

Therefore, with the growth in the availability and diversity of second charge mortgages, here are four frequent opportunities where a second charge mortgage might just prove to be the most suitable solution for a client.

Low legacy rate or interest-only

There are many borrowers on a lifetime tracker or variable rate that is so low that they would be unable to match their current rate by re-mortgaging. For clients in this situation who want to raise extra money from their property, it can sometimes be more cost-effective to use a second charge loan to borrow the money, rather than shift the entire balance onto a more expensive rate.

Need some assistance?

If you think this form of loan could assist you in your future planning it is particularly important to ensure you get the correct advice. There are many lenders offering numerous second charge loans, please call one of our independent advisers who will be able to guide you in the correct direction.

The latest figures from the Office for National Statistics show self-employment is at its highest point since records began over 40 years ago, this means nearly 19% of UK workforce is now self-employed. 

This ever-increasing sector of the UK workforce is probably the most in need of specialist lenders.

A large number of high-street lenders appear not to be interested in them at all as they see them as high risk.

This also applies to not only the self-employed but pretty much any working person in non-standard employment. Regular lenders seem to class this category of the work force as “too difficult” thus the need for specialist lenders. 

If you are self-employed and have a current mortgage a second charge loan could be just the help you are looking for. Second charge loans are fast to complete and far more flexible than any re-mortgage.

A second charge loan offers a quick affordable solution to raising cash secured on your home.  As lending to the self-employed is a specialist market it is recommended to contact an independent broker to get advice as to which loan suits your needs. Independent brokers have access to various lenders who offer very competitive rates in all areas of lending.

One of the many advantages of a second charge loan is it does not affect the first charge mortgage sitting on the property. In this case it makes a second charge a very cost-effective option and can save thousands on exit fees on the first charge mortgage.

Need some help?

If you think this form of loan could assist you in your planning please do get in contact and one of our independent qualified advisers will be happy to guide you in the correct direction.