Raising funds or borrowing money at any time in life especially nowadays can be very daunting and expensive if you get it wrong. There will be various reason you need to raise cash and many options open to the majority.

First piece of advice to heed is to get professional advice as the wrong loan over a period of time could cost thousands more than you need to pay.

Generally, a second charge or secured loan will be cheaper than one unsecured but again do seek advice as this is not always the case. Using a reputable broker will help eliminate a lot of the questions as they are experienced with all types of lending.

A second charge mortgage provides an extremely useful alternative where consumers want to raise additional funds but do not want to change their existing first charge mortgage – especially if there would be additional costs in doing so.

There are some very clear benefits a secured loan can offer when used correctly which could well improve borrowers long term financial prospects. Although consolidating debt is not always the right answer, a secured loan is often a suitable option given the lower interest rate charged when compared to an unsecured loan.

Could this be useful to for you?

• Fast completion
• Low interest rates
• No need to change original mortgage
• Loan terms to suit majority of needs

The broker

These days due to the vast choices open to the prospective borrower it is vital they get a professional adviser to point them in the right direction. With so many loans and re-mortgages available anybody contemplating taking out loan would be very well advised to seek broker advice.

Help required?

If you are looking to raise money from the equity within your property, please make contact and one of our advisers will be pleased to assist.

With lenders offering lower rates and the majority of brokers charging lower fees, today’s second charge borrower has access to a very real alternative to a re-mortgage or further advance.

Indeed, second charges are having something of a renaissance. The renewed and growing interest from the intermediary market can be demonstrated by significant growth in both second charge loan volume and value during the past year.

Figures recently released by the Finance & Leasing Association reveal that second charge mortgage business increased in July by 21% in value and 23% in volume, compared with the same period last year.

What is more, consumers are beginning to gain awareness of the second charge option and to understand how it can assist them.

All of that said, a gap in understanding lingers, with a recent survey showing that many consumers remained either unaware or cautious of the sector.

Who can benefit taking out a second charge?

Second charge mortgages are not necessarily the best option for every client wishing to capital raise. Typically, they prove useful for clients who are:

• Tied into a fixed mortgage with restrictive early repayment charges
• Benefiting from an existing low mortgage rate
• Being offered a further advance with a higher rate
• Currently on an interest-only mortgage product
• Being declined on affordability for capital raising
• Wishing to capital raise for business purposes, inclu­ding deposits for buy-to-let mortgages
• Recently self-employed or contract workers; or
• Recently retired.

Second charges also offer criteria advantages, such as higher loan-to-value borrowing.

Like to know more?

If you would like to discuss your borrowing options please do make contact and one of our fully qualified advisers will be happy to assist.

The majority of homeowner at some stage of ownership will want to raise extra cash for a venture they have in mind. Raising those funds can be very confusing as many people just do not understand what options are available to them. Ever more popular these days is to raise funds secured on the family home, known as a second charge which is a loan that sits behind the current mortgage secured on the property.

Getting advice

Very simply the best thing to do if you wish to borrow money is to get independent advice from a fully qualified broker, the independent broker will have access to all loans available to you and will guide you in the correct direction.

Second charge market  

Much has been said about the upward trend of the second charge sector over the past year. Brokers and clients alike continue to be surprised at how competitive the rates of interest are plus the wide range of products on offer.

Since the implementation of the Mortgage Credit Directive there has been a significant increase in lenders entering the second charge sector. These fresh players have helped to reduce annual interest rates through the increased competition they bring.

Currently the cheapest published rates on offer are just a little over 4% with some lenders offering the potential to secure even cheaper rates based on risk, second charges provide a valid alternative for clients looking to raise additional funds against their property.

Range of deals on offer

 

Not so long ago in the “seconds market” there was not even a fixed-rate option available, with every second charge product at the lender’s standard variable rate. The fact that discounted and fixed rates have been added to product ranges is testament to the progress of the sector in a relatively short period.

Help?

If you are looking to raise funds against your property please make contact and one of our advisers will be happy to assist.

2018 is progressing well with brokers reporting a steady rise in both applications and completions compared to the same period last year. A broker in London commented, “seconds offer speed, flexibility and affordable interest rates for all homeowners wanting to raise funds”. “Since regulation lenders have reduced set up costs and interest rates”. “The homeowner is steadily gaining confidence in this form of fundraising”.

There are many advantages that a second charge loan offers, not least the quick turnaround time which can be as little as 15 working days (standard case). This, of course, is a great deal faster than a standard re-mortgage which can drag on for months and months.

Second charge lending is increasing its popularity month on month. When you compare the interest rates on offer to unsecured lending it is very evident why this form of fundraising is growing in stature.

Lenders have been quick to recognise the increase in popularity and have responded in a very positive manner with a wealth of new and innovative products.

This form of lending is specialised and if you wish to raise funds using the equity within your property do get qualified advice as a wrong move could prove very expensive.

Lenders are reporting the largest growth area of this type of funding is via the self-employed workforce which includes landlords (buy-to-lets). Raising funds for the self-employed or contracted worker can be a challenge indeed but second charges do offer far more flexibility, so they are worth exploring.

Can we help?

If you are considering raising funds on your property, please do contact one of our fully qualified advisers who will guide you in the right direction.

Brokers and lenders alike have welcomed the latest figures showing second charge lending hitting an all-time high in June of this year.

These figures are partly down to the new homeowner awareness of second charge lending and what’s on offer. The lending industry has done an excellent job of spreading the word and showing just how a second charge loan in certain circumstances is better than a conventional re-mortgage.

New and existing buy-to-let investors have started to raise the required deposit levels by taking out second charges on existing property holdings.

July and August been very busy as well with brokers reporting a steady rise in both applications and completions compared to the same period last year.

There is little doubt second charge lending is increasing its popularity month on month. When you compare the interest rates on offer to unsecured lending it is very evident why this form of fund raising is growing in stature.

There are many advantages that a second charge loan offers, not least the quick turnaround time which can be as little as 15 working days. This of course is a great deal faster than a standard re-mortgage which can drag on for months.

As second charge lending grows in popularity new and innovative products are hitting the market on a regular basis. Interest rates have reduced considerably over the last 3 years and they now offer a very attractive overall package.

The largest growth area of this type of funding is via the self-employed workforce. Good news is the lenders have reacted positively to this and look very favourably towards the borrowers requirements.

Second charge lending will not suit every case, it is vitally important to get the correct advice as a wrong choice can cost hundreds extra in unnecessary interest charges.

Help needed?

If you are considering raising funds on your property please do contact one of our fully qualified advisers who will guide you in the right direction.