Why choose second charge lending?

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Loan choices these days are vast and in many cases very confusing for the borrower. It is highly recommended before you take on a new loan to get qualified advice as a wrong move could cost you dearly in the long run.

The expert will look at all your choices and may well select a secured loan as right for your needs. This won’t always be the case. Of course the final choice will always be yours but let’s look at why secured lending may help.

One reason you may wish to choose a second charge loan is that it’s likely to offer better rates of interest as the loan is secured.

Unsecured loans from high street banks and other sources can be notoriously expensive, we have all seen the rates charged by the so called “pay day” lenders.

The reason for a secured loan being more cost effective is due to the lender having to assess the risk. If you are a high-risk borrower they will need to offset the risk with higher interest rates. So if you offer security on the other hand, then the risk involved is much lower and the lender will offer far better rates.

This is indeed particularly useful for those who might find it difficult to obtain the loan required without security. Such groups of people may include the self-employed or those who have had past credit problems.

For many people the choice is between a second charge loan and re-mortgaging rather than between second charge and unsecured loans. There are a number of reasons a second charge loan may be preferable over a re-mortgage but there are two key very common factors.

1) Your credit history has deteriorated since you took out your mortgage.

2) You currently have a mortgage with penalties to change.

These two factors alone make a second charge deal an attractive way forward to securing the funds required.

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 right one to suit you. 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.

Are expensive loans holding you back?

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Anyone who is looking to make some savings this year or to cut back on their outgoings will be looking very closely at any expensive loans they have. This year has seen households around the country taking out second charge loans to reduce overall expensive debt.

Making a saving of £200 or £250 per month on a loan is really not that unusual these days – and who wouldn’t like £2400 or £3000 a year in their bank account?

Uncertainty is fuelling this behaviour. People in truth aren’t really that bothered by Brexit or the Trump effect – the truth is many people are feeling the pinch and have less money than they did have a few years ago.

With interest rates currently at a very advantageous level feeling is they can only go in one direction and that is upwards. There is already some talk of that during 2018 and beyond so the chance to negotiate a fixed rate and save money is looking increasingly attractive for borrowers.

Lenders are very aware of this situation and are monitoring it very closely as they want to keep pace with this growing trend.

Recent surveys show homeowners when raising funds see speed of completion as a major factor. The industry has noted this and worked very hard to reduce lending times and now the average completion can happen within 15 working days. This is a big step forward and goes to prove the lenders take this form of lending very seriously.

Help required?

If you require some help with your borrowing please do make contact and one of our advisers will be happy to assist.

Why second charge lending?

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Second charge loans can be used for many reasons, such as a deposit for a new property investment, buy-to-let and re-development of an existing property to name but a few.

Many borrowers now are also viewing second charge loans as a simple and a cost-effective alternative to mainstream lending. A second charge loan is far cheaper in the long run than any unsecured loan, just look at some of the rates on offer from the “payday lenders”.

Many people these days have a lot of expensive short-term loans and credit cards, if you are one do consider alternative loans such as a second charge. Short-term loans and credit cards can have very high annual interest rates so do check to see if you could save in the longer term by switching.

If you want to review your lending do ensure you get the correct advice from a fully qualified adviser as an inappropriate loan can be very costly.

Second charges are fast and can complete in a matter of days as opposed to months on a re-mortgage.

There are many reasons a second charge loan may be preferable over a re-mortgage but there are three key common factors.

  1. a) Your credit history has deteriorated since you took out your mortgage.
  2. b) You currently have a mortgage with penalties to change.
  3. c) Speed of completion.

Second charge loans nowadays come in “all shapes and sizes” and there is likely to be one to fit your needs. The crucial thing is to get professional advice as there are so many options open to homeowners.

Can we assist?

When taking out a new loan you should seek professional advice, we have a team of experts waiting to take your enquiry so please do make contact.

Second charges are a serious alternative

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The last five years has seen this type of lending increasing in stature as homeowners become aware of the huge cost of the so called “pay day loan”. For many years a second charge loan was something clients only did as a last resort due to the high costs compared to a re-mortgage. This has changed dramatically recently as lenders have recognised the potential this type of lending has. Second charge loans are quick and normally a lot cheaper to set up than a standard re-mortgage.

Before you decide to re-mortgage do take time to explore the benefits this form of lending can offer. Second charges will not suit every situation, but it is worth getting professional advice to see if this could help you.

Who can benefit from second charge lending:

  • First charge has a tie-in period and has penalties to change
  • Funds required very quickly
  • Have been in arrears with your current lender and want to avoid disturbing your current low rate for a sub-prime mortgage
  • You have an interest only mortgage and you do not wish to re-mortgage to capital & repayment
  • You are benefiting from a low interest rate and do not wish to disturb the current product

Most common reasons for a second charge loan:

  • Want to consolidate outstanding loans and credit cards
  • Want to carry out home improvements
  • Want to inject cash into a business venture
  • Have had adverse credit and wish to speak to a company who understands the situation
  • Are self-employed and wish to raise finance for one of the above

Can we help?

If you would like more information on how this type of loan could help you please do contact and one of our advisers who will be happy to assist.

Mortgage prisoners

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Interest-only and older mortgage borrowers have found themselves prisoners of their own mortgage lender. Borrowers in this category are turning to a second charge loan as a solid alternative to re-mortgage as a way of raising cash.

Figures show that there are currently over 2 million people with an interest only mortgage and the majority of those are over 50 years old.

Unfortunately, many of the interest only borrowers, who only pay the interest each month on their mortgage and no capital reduction, find themselves with a problem. Many banks and building societies are now insisting that any re-mortgage be converted to a repayment mortgage, meaning payment of interest and capital. This presents a problem to the more mature borrower as payments each month would increase significantly.

Second charge loan

A second charge loan – or second mortgage as they are known – works in the same way as a mortgage and is secured against your property. As the name suggests it comes second in line behind your existing mortgage deal.

Raising capital

If you need to raise funds without re-mortgaging now is a good time to review your situation as interest rates for second charge lending are at an all-time low. There is a very good selection of plans available from standard rate through to various fixed term deals. It is very important to remember this type of loan will NOT suit every case. It is vital to get expert professional advise as to the correct loan to meet your needs.

Help required?

If you would like to know more please call one of our fully qualified advisers who will be happy to assist.

 

What to consider when taking out a secured loan (Second charge)

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Possibly more challenging than deciding whether or not to take out a loan is finding the best secured loan for your needs. Always bear in mind when selecting your loan the terms and interest rates being charged plus any associated fees. Always compare the fees, conditions and the interest rate before deciding.

Most importantly seek professional advice as to the most suitable and cost-effective loan to meet your needs now and in the longer term. An independent broker will have access to a large selection and will be able to advise you accordingly.

Other things to consider are

  • Is it a variable or fixed rate loan? Remember that variable rate loans may charge lower interest but could change their rate at any time.
  • How long will you have to pay the loan off? The shorter the term, the higher your monthly repayments are likely to be, but also the sooner you will be able to repay the loan. If you’re not confident you’ll be able to repay it in the minimum term offered by the loan provider, a longer term with lower monthly repayments might be a safer bet.
  • How will your credit score impact the rate you are offered? Sure, you can get a secured loan with poor credit, but that doesn’t mean you’ll get the advertised rate, which the lender only has to offer to the majority of applications, not all.

The criteria, much like the loan amount, can often come down to personal preference and circumstances. Generally speaking, the lower your loan to value (LTV) – and therefore the greater amount of equity you have – the better loan you can get. Just like with regular first charge mortgages, a low LTV marks you as being less risky to the secured loan provider, as you’re essentially borrowing a lower percentage of your home’s value.

Need some assistance?

If you would like to know more about secured lending and how it could help you please do make contact and one of our advisers will be happy to help.

Second charge lending on an upward spiral

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Second charge lending is fast becoming a sound and solid way for homeowners to put their finances back in order. The majority of people are becoming very wary of the so called “pay day” lenders. A recent client of ours commented “I have taken out a small second charge loan on my property to clear a couple of credit cards and a small pay day loan”. “I have to say the process was fast and efficient and I saved a good deal of money on my monthly outgoings, I would fully recommend this action to anybody if asked.”

Second charge lending has always been in the market place but over the last 5 years this form of funding has grown significantly since regulation.

Buy-to-lets

We are now seeing landlords beginning to utilise this method of raising capital which just did not happen in the past. Landlords with good equity within their properties have seen this route of raising capital as quick and very uncomplicated.

There is no doubt that lenders have seen the potential growth in this area and they have responded very well, offering a good range of flexible loan deals. Two or three years ago there was only a small choice, plus the rates were a lot higher.

In the years gone by if a homeowner or landlord wanted to raise capital from the equity within their home brokers invariably recommended a re-mortgage. This situation is changing as all parties become more aware of the advantages of a second charge loan has to offer. If you are looking to release funds tied up within your property it is strongly recommended to explore this type of loan as you could save a good deal of money, especially on legal fees.

Can we help?

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

Home owners are in a very strong position

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Homeowners have choices if they wish to raise capital, they could re-mortgage or take out a second charge loan secured on the equity within the property.

The latest data released has revealed that the average value of a house across the country is at an all-time high. This information puts the homeowner in a very strong position if they are contemplating raising finance and using the home as security.

Second charge lending has made huge strides in the last 6 years and now should be considered before any decision is made about re-financing your property. Second charge lending offers a fast and effective way to raise capital at a very reasonable cost.

Interest rates and set up costs offered by lenders have reduced significantly over the last couple of years in line with the mortgage market.

In the past re-mortgaging was by far the most popular route taken when fund raising was required but not anymore.

The range of second charge loans are increasing every day with more flexible repayment methods being offered which has found favour with the borrower. Repayment periods are flexible and are generally set to suit the client’s wishes.

As a homeowner now is a very good time to borrow money using your home as collateral. A second charge loan WILL NOT suit everybody, so, if you wish to raise funds do contact a qualified adviser as to the options open to you.

Can we help?

Please do make contact if you wish to know more about raising capital using your home as collateral.

Second charge loan choices are increasing

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It’s, without a doubt, secured lending popularity is increasing on a daily basis. Second charge mortgages or secured loans have increased this year month on month and continue to do so as the year progresses.

The biggest growth area of loans is to the self-employed and buy-to-let landlords, 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 type of lending is so easy and quick to secure, lenders are increasing their product portfolios at a rapid rate. Speed of lending is always a key issue for borrowers and a straightforward case can complete in approximately 16 working days, as you can see this is so much quicker than the standard re-mortgage.

We are seeing different lending plans emerge daily and this can only be good news for the borrower. Interest rates and fees are reducing as well, 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. Borrowing money these days is a complex issue and it is vitally important to get the right one that meets your needs in both the short and long term. It is always recommended to seek professional advice when taking out any form of loan.

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.

Second charge lending potential

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Also known a secured lending

Second charge loans can be a very useful facility for managing overspending and could help resolve debt problems that may have built up over the years.

For those borrowers on a favourable mortgage deal with the first charge lender, they can keep that deal and use a second charge loan to pay off or consolidate their other debts.

Second charge loans in the majority of cases will complete much quicker than a re-mortgage which can prove vital in certain circumstances.

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.

There is little doubt that this form of lending will continue to grow as it has done over the last three years. The majority of borrowers are waking up to the fact that unsecured lending is far too expensive both in the short and longer term.

If you are looking to improve your finances a secured loan could very well suit your needs, it is very important to seek professional advice as there are so many options to choose from.

Help required?

As a borrower finding the correct loan for your needs can be a very daunting task, there are so many options available to the majority. If you are contemplating refinancing please do make contact with one of our fully trained advisers, they will be happy to assist you in making the right choice.