Borrowers looking to second charges

More and more borrowers are turning to second charge loans as mortgage companies tighten controls on borrowing. Figures just released for the last quarter show “seconds” increasing to homeowners by 19% on the previous quarter, these increases are likely to be down to tighter controls from high street banks and other traditional lenders.

Brokers up and down the country confirm they are using second charges to assist clients in achieving their targets as high street lending becomes more and more difficult. One broker in Sussex said, “secured finance is filling a funding gap which has appeared”. “Borrowers are finding it more difficult to obtain loans from mainstream lenders who are implementing tougher affordability restrictions”.

Some 70% of brokers reported a significant increase in secured loans in the last quarter and the trend seems to be continuing. Of the brokers survey 100% of them stated they found second charge finance very easy to use and quick to complete. The Sussex broker commented “We have used “seconds” in the past and now we are using them on a more regular basis”. “Clients in general are impressed with the efficiency and speed of completion a second charge loan offers”.

There is little doubt this form of loan should be taken seriously especially when you compare the interest rates being charged by unsecured lenders.

Like to know more?

If you would like to know more about second charge financing and how it could assist you please do get in contact and we will be happy to help.

Expanding options with Second charge loans

New types of loans make second charge lending a very serious player in the lending market as client confidence grows. Over the last 24 months, interest rates have reduced considerably making this type of loan a very serious option to a re-mortgage.

New lenders entered the second charge market in 2016 and this pattern has continued into 2017. Existing lenders are not holding back either as a vast array of new loan choices hit the marketplace in this ever-growing area of flexible lending.

Adverse credit

In the past, many people who applied were declined due to adverse credit. New age lenders are now assessing clients based on their current situation and not what has happened in the past. This is certainly good news for the borrower as lenders wise up to the potential this type of lending has. No longer are clients punished for a poorer than normal credit rating as in the past.

What loan types?

New loan deals are coming onto the market rapidly and it is advisable to get professional help when selecting one for your needs.

  • Fixed rates for 2,3 and 5 years
  • Tracker rate
  • Standard variable deal
  • Other discounted

Loan type features

  • Residential and buy-to-let
  • Can be cheaper than a re-mortgage
  • First charge loan not affected
  • Low set up fees
  • Low interest rates
  • Speed of completion
  • No redemption fees (selected loans)

Help required?

If you would like more information please make contact and one of our fully qualified advisers will be happy to assist.

Increase again and again and again

Second charge mortgage business in August 2017 rose in value by 25% compared to the same month last year, according to the figures from the Finance & Leasing Association. There was £91m worth of business in August made up of 1,905 applications – an 11% increase from August last year. The second charge mortgage market reported another strong month in September, with new business continuing to grow from a low base.

A second charge mortgage provides a useful alternative where homeowners want to raise additional funds but do not want to change their existing first charge mortgage. They are also a great deal cheaper and more flexible than unsecured loans.

Over the past 3 years, second charge lending has moved forward at a great pace offering homeowners a real alternative to a standard re-mortgage. Interest rates and fees have reduced significantly and the completion time of a deal can be as little as 20 working days.

The industry’s huge increase goes to show more homeowners are becoming aware of this form of a loan and how it could assist them in their future planning.

Providers

Most high street banks and standard lenders 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.

As the second charge sector continues to increase, lenders are producing more new products to assist the borrower.

Can we help?

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

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Second charge loans are surging ahead

It’s no secret that second charge lending is surging ahead as more homeowners look to secure cost-effective loans. Figures clearly show second charge lending is becoming a “household favourite” as opposed to expensive unsecured loans. Homeowner awareness has increased substantially over the last 3 years thanks to brokers taking on board the positives this sort of lending offers.

Second charges are widely used if:

  •  Currently on an interest-only mortgage product
  • Have been declined on a re-mortgage
  • Wishing to capital raise for business purposes
  • Recently self-employed or contract workers
  • Recently retired

Second charges also offer criteria advantages, such as higher loan-to-value borrowing, ERC-free or low-ERC loans, and lending to borrowers with complex income or multiple sources of income, or those with adverse credit.

The length of time it typically takes to arrange a mainstream first charge mortgage, re-mortgage or further advance can prove frustrating for those looking to raise capital quickly.

Many second charge lenders can arrange the required loan within 21 working days if everything is straightforward which is a considerable time-saving.

Rates and fees are also hitting impressive lows. Lenders in the sector continue to reduce interest rates, which currently start a little over 4%.

There are also several attractive exclusive, semi-exclusive and restricted panel products available through specialist packagers.

Although these do not challenge mainstream first charge mortgage rates, when considering the overall client scenario and costs, second charges loan are surging ahead and can provide a viable alternative.

Like to know more?

If you are looking to raise capital on your property please do make contact and one of our advisers will be happy to help.

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

Second Charge Mortgage coming into its own

After years of being known as a first charge mortgages slightly less attractive cousin, second charge is starting to come into its own.

With many lenders offering lower rates and the majority of master 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 — arguably prompted in March 2016 when the European Mortgage Credit Directive came into force — can be demonstrated by significant growth in both second charge loan volume and value during the past quarter.

Figures recently released by the Finance & Leasing Association reveal that second charge mortgage business increased in August by 27.5% in value and 30% in volume, compared with the same month in 2016.

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

Who can benefit?

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

 

Would you like to know more?

 

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