Second charges grow rapidly

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The second charge loan industry has increase rapidly over the last 2 years setting numerous records along the way for business conducted.

The facts are the second charge loan market has rapidly increased by a massive 31% in 2016, with the total size of the sector reaching record levels. What is even more astonishing when you realise that the second charge lending market has nearly tripled in size over the past four years.

2017 is following the same trend with loan applications and completions up by a further 9.7% on the year to date.

The vast majority of high street banks and standard lenders still continue to show a reluctance to lend on a second charge basis leaving the door open for the specialist lenders. Second charge finance has provided an invaluable resource to those looking to secure finance for their projects quickly and cost effectively.

The industry’s huge growth shows consumers are becoming aware of the ways second charge loans can help their financial situation.

As the second charge sector continues to build on its successes, we are seeing lenders producing more new products to assist the borrower. These are very exciting times for the industry as it looks forward to 2017 and beyond.

Like to know more

If you require more information of how a second charge loan can help you please call us and we will be happy to assist. We have fully qualified advisers waiting to take your call.

 

Aware of Second Charge

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Are you aware?

Second charge mortgages are widely available through specialist lenders, yet this latest research suggests it’s only the minority of people who explore them as an option when looking at ways to raise money.

Of the minority who were aware what a second charge mortgage was, 30% didn’t understand what the difference between this and a re-mortgage was.

Since April, the second charge market has been regulated by the Financial Conduct Authority, as part of its Mortgage Credit Directive. This means they are now more strictly governed with regards to affordable lending, giving consumers more peace of mind. Previously they fell under the FCA’s consumer credit agreement.

For some borrowers, a second charge mortgage will be a better option than a re-mortgage, so it’s surprising that so many consumers are unaware of what they are and how they work.

There can be several reasons that a second charge might be the preferred option. For example, you may not want to extend the term on your current mortgage, or lose a good rate, particularly if your circumstances have changed or you have an interest-only mortgage that might be difficult to replace.

Demand for this kind of loan, particularly when it comes to funding home improvements has increased substantially over the past 2 years. One thing which is very evident is that consumers have become very aware of just how much they are paying for any unsecured loans they may have.

For those thinking of raising money by releasing equity in their properties, it’s important to explore both second charge and re-mortgages.

Can we help?

 If you would like to know more about raising funds from the equity within your property do make contact, one of our fully qualified advisers will be happy to assist.

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Second charge rates fall again

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A recent survey of lenders has shown second charge loan interest rates are decreasing, this is no doubt due to the competition within this fast-growing market. Lenders are keen to secure new business and this is driving rates and fees downwards. More lenders are finding ways of attracting business and this is often reflected in the charges, which means it is worth shopping around for the most favourable deal.  It’s a very good time to be a borrower at present with such low rates on offer, also applications are completing much quicker than years gone by.

Second charges have many plus points especially if your first charge loan is a fixed or a beneficial tacker deal. It is very wise to seek professional help these days if you are looking to take out a new secured loan as the options are vast.

Speed of completion

Last year saw a significant reduction in the time it takes to complete a second charge loan, more good news for the borrower. On average a lender estimates to complete on a “clean case” within 28 days and on some occasions this can be even quicker.

This form of loan is growing in stature all the time and is now a very serious alternative to a traditional re-mortgage which will never complete as quickly.

Need to know more?

If you are looking for more information regarding second charge lending please do call one of our fully trained advisers. We are here to help and look forward to being of assistance.

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Consolidate expensive debt

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The early part of 2017 saw a sharp rise in the number of mortgage advisers looking for second charge loans for clients concerned about their expensive long-term debt.

According to figures from the Bank of England, Brit’s personal debt grew 11% in the year to 30 November 2016 to stand at £193bn – the highest level since December 2008.

This notable growth in the level of household debt, alongside record low rates on second charge products, are combining to boost demand for second charge loans.

If borrowers are paying a low interest rate on their main mortgage, or they are within an early repayment charge period, a second charge mortgage can be the most sensible way to consolidate that expensive debt.

There are more low rate second charge products on the market than ever before, many at highly attractive rates, so there are real opportunities now for brokers to help their clients consolidate their debts.

Secured loans should be considered as a viable debt solution offering products that are affordable and sustainable.

Lending these days is a very confusing area for most consumers with so many alternatives available. It is highly recommended that anyone considering taking out a new loan should seek professional advice as a mistake could prove very costly.

Can we help?

If you are considering taking out a secured loan please do make contact and one of our fully qualified advisers will be happy to assist.

https://www.second-charge-loans.co.uk/contact/

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New heights reached with second charge mortgages

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The number of people opting to take out a second mortgage has leapt to its highest level since 2008, according to new industry data.

During March, £93m of second charge mortgages were taken out – up 22% on the previous month. The figures show that growing numbers of homeowners are deciding to cash in on the equity within their property.

A second charge is a loan that allows people to use any equity they have in their home as security and effectively sits on top of an existing mortgage. It is usually obtained from a separate lender and if someone takes one out, it means they will have two mortgages on their home. For many, a standard re-mortgage or a further advance from their existing lender would probably suit their needs better, but mortgage brokers say that for some homeowners it would not make sense to refinance their main mortgage, while others do not have that option.

The £93m figure for March translates into just over 2,000 individual second charge mortgages, and the FLA confirmed that both these figures were at their highest levels since the 2008 financial crash.

Recent industry figures show that consumer spending on credit rocketed in the past year as households increased their reliance on second charge loans to buy cars or furniture.

Second charge loans are now regulated as are first charge, interest rates have fallen significantly which all in all now makes a second charge loan attractive to the homeowner.  The lowest rate in 2012 was around 6.9%, but they now start at around 4%-4.5%.

Can we help?

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

https://www.second-charge-loans.co.uk/contact/

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Benefits of Second charge loans

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Second charge lending has many uses and one of the benefits of this type of loan lies in its flexibility.

It may be the case that those who need to raise funds are not aware they can do so through a second charge which is, of course, where advisers and brokers come in.

Benefits of this type of lending are that they can be suitable for a far wider range of situations than many realise.

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. The funds raised could be used to fund home improvements, for loan consolidation and so on.

Parents are increasingly helping their children onto the property ladder by lending them money for their first home as young people find themselves stuck in a cycle of renting and being unable to build up enough of a deposit. A second charge loan could be perfect in this case.

Another of the main reasons for applying for a second charge is for credit purposes if there is evidence of poor credit history.

Second charge lending has so many benefits it is worth checking out whether this may suit your needs. Do ensure you seek professional advice as there are so many options.

Clients most likely to benefit from a second charge are those looking for smaller amounts of funds where the main mortgage is on an historic low rate term base rate tracker product.

Need some help?

Please don’t hesitate to contact if you require any assistance raising funds, one of our advisers will be happy to assist.

https://www.second-charge-loans.co.uk/contact/

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Second charge loans on the increase

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The number of loan applications has seen an increase of nearly 23% in the quarter ending March 2017 compared to the Q4 ending December 2016. April and May have continued to increase as consumers become more aware of how a second charge loan could benefit them.

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.

Why choose a second charge loan?

  • 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.
  • Helps the self-employed

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.

https://www.second-charge-loans.co.uk/contact/

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Completion time for second charge loans

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2017 has seen a significant decrease in the completion time for second charge loans which is great news for the industry on the whole. Confidence is growing rapidly in this type of lending as the general public see the benefits it has to offer.

A reduction in completion time is a deal is good news for the borrower, we can confirm our records show that to date this year a 18% reduction has been achieved. The important thing is the lenders we use are still looking for ways to reduce the time even more, this just goes to prove how serious they are about this type of business.

This year has seen a significant increase in the second charge market as more borrowers look to secure faster financing for their upcoming projects. Traditional high street lenders still are lacking the ability to compete with seconds financing for speed and efficiency.

Options expanding

As more people use second charges so the products increase, over the last 2 years we have seen a steady increase of deals on offer. This unique type of lending is most certainly far more flexible than the majority of re-mortgages that are available.

All this spells good news for the borrower as the product choice and options expand plus the costs are reducing.

With so many substantial changes taking place on a rapid scale it is without doubt best advice to seek help before you make any decisions regarding your future financing. This course of action could well save you thousands of pounds in the future.

Can we help?

If you require any assistance with your future financing please call one of our experienced advisers, we are here to help.

https://www.second-charge-loans.co.uk/contact/

Lenders look to re-price their products downwards

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Getting more and more attractive

There has been a flurry of activity in the second charge loan sector recently as lenders look to re-price their products downwards. We are pleased to inform you second charge loans are at their lowest rates the sector has ever seen. Great news for borrowers indeed, this is without doubt one of the contributing factors to second charge’s rapid growth over the last three years. This type of loan has been getting less expensive as competition for business intensifies, plus new funding sources are coming into the market rapidly.

Lenders are now looking for ways to attract more business and we are now seeing a lot of new offers creeping into this expanding form of lending.

Speed is important

We are always asked with virtually every case we do “how quickly can this be done”. The answer is every case will vary due to the complexity of the deal. The average time currently to complete on a “straight forward loan” is 28 working days.

To help complete the case quickly clients should follow these golden rules.

1, Good fast communication.

2, Skype contact details.

3, Return applications rapidly.

4, Easy access to the property for the survey.

5, Internet access.

 Need some advice

If you require assistance with your next loan please do call one of our expert advisers who will be happy to help.

https://www.second-charge-loans.co.uk/contact/

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Second charges have lift off

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The second charge mortgage market has undergone huge changes over the last 12 months following the regulation of the sector by the FCA. This has made second charge mortgages move centre stage, and acquire a greater veneer of respectability, but it comes with additional responsibilities.

Some of the original rules attached to them under regulation by the Consumer Credit Act have still carried over, but the FCA has added to the rules governing their sale.

The positive knock-on effect has been seen in the sales of second charge mortgages and industry observers expect the market to take off even more now.

As you can imagine, since the introduction of the Mortgage Credit Directive there has been a huge number of changes in the second charge lending market.

These changes have been extremely positive. The major one from our perspective is that consumers now benefit from a much more professional approach when applying for a second charge mortgage. The process they go through is now is as rigorous as when they are applying for a mainstream mortgage or a re-mortgage. From a customer journey perspective, this is a fundamentally positive change. This attention to detail on front-end processes means that the back-end is far quicker.

The other significant change is that lenders are far more competitive than they were. This is reflected in the products now available, for example interest rates are starting at 5% or less.

Common reasons for using a second charge loan include preserving their existing first charge mortgage if they have a good deal or would incur charges to change, or if they have unusual circumstances like becoming self-employed.

Can we help?

If you would like to discuss your lending requirements one of our fully qualified advisers will be happy to assist.

https://www.second-charge-loans.co.uk/contact/

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