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.

 

The number of loan applications increased by 28% in the quarter ending September 2018. October November and December continued on the upward trend as consumers become more aware of how a second charge loan could benefit them.

Is it time to reduce expensive debt?

It would seem the UK public are keen to reduce expensive debt (credit cards and un-secured loans) so as to free up monthly funds. The Christmas period always puts extra strain on the household budget, if you decide to act you should be very cautious as to the action you take.

Do seek professional advice as taking out new loans is not always best advice.

Why choose a second charge loan?

• Faster to complete than a traditional re-mortgage.
• Normally less fees.
• Loans are very flexible.
• Ability to retain current mortgage deal if on a low rate.
• Helps the self-employed
• Landlords with buy-to-let mortgages on fixed deals

Choosing a lender

There are an increasing number of second charge lenders entering the market and choosing one can be a minefield, getting professional 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.

 

 

The biggest growth area of secured loans is to the self-employed and individual Landlords 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.

Different lending plans emerge daily, and this can only be good news for the borrower. Interest rates and fees have reduced as lenders see this market as a growth area in the longer term.

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.

One of the big appeals that second charge lending offers is speed of advancement which can be very important to the borrower. On average a second charge loan is completed within 15 working days, this does of course vary dependant on the complexity.

A recent survey showed that 54% of people surveyed said speed of completion was their priority with affordable rates polling 37%.

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.

 

 

 

 

To apply for a second charge mortgage you do not necessarily need a very good credit score. In fact, in some cases, you may still be able to get a second mortgage with a bad credit score.

In order to be considered for a second charge mortgage you will need be a homeowner. However, you do not necessarily need to be living in the property you are taking out the second charge mortgage on. (Buy-to-Let landlords)

There are a few reasons why you might want to take out a second charge mortgage, but before you determine whether or not you can get one, weigh up your options.

If you have been considering taking out a second mortgage, the first thing to do is to decide how much money you need, and what you will be spending it on.

The main attraction for a second charge mortgage is that people who have a less than perfect or bad credit score can still be in with a chance of being approved.

Another reason why people consider taking out a second charge mortgage is that it could work out cheaper than re-mortgaging when you want to raise extra money. Also, it might be easier to get a second charge mortgage, even if you have a fluctuating income, or are classed as self-employed.

Important is to shop around with lenders. See what their loan rates are like, so you get a good feel of how much APR you could be paying. It is very important to get the loan that fits your needs, so you might want to consider using an independent professional broker. They will have access to all loans available and be able to advise you accordingly.

Need some help?

If you are looking to borrow money and own a property please make contact and one of our advisers will be happy to assist.

Confused about your next loan?

An unsecured loan is a loan made to a party without any particular asset offered as collateral/security. A secured loan on the other hand is secured on your property, which has very different implications.

Unsecured loans are usually for small amounts but can be up to £25,000. The loans are generally repayable over a term of between 1 to 5 years – normally on fixed interest rates.

If you have an unsecured loan, this means that if you become unable to repay under the terms of the loan, whilst you will still remain liable under the terms of the agreement, the lender does not have the immediate right to take possession of your assets. They can however apply for a Bailiff’s order to come and take goods to the value of the outstanding loan via the courts.

If you take a Secured loan, this is in effect a 2nd mortgage or 2nd charge.

The sum lent can usually be much greater, dependent on the financial circumstances of the borrower and the amount of equity available in the house it is secured against. Secured loans are generally available from as little as £3,000 and interest rates are generally much more competitive than unsecured loans.

Secured loans may be for a period of up to 30 years or more and because there is some security offered by the borrower, the risk to the lender is much less. Interest rates are therefore, usually, much less, although interest rates might be variable and dependent on external factors.

The mortgage lender generally has the right to take possession of the property if the loan goes unpaid or if the terms of the agreement are not met they have the right to sell it. This is usually referred to as being in ‘default’ or ‘forfeiture’. This added ‘security’ reduces the risk to the lender and it is therefore usual for a secured loan to be cheaper with interest payments being lower to reflect the lesser risk.

If you have a weak credit history you are more likely to obtain a secured loan than an unsecured loan.

Need some advice?

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