A second charge mortgage (secured loan) is a loan that allows you to use the equity (difference between what you owe and its value) within your property as security and it effectively sits on top of your existing mortgage. Usually this second loan would be arranged via a different lender to your existing mortgage, there are plenty of specialists in the market place offering various options. On completion of the second charge it then means you will have two mortgages on your home. The main mortgage will always take precedence over the second loan.
Second charge lending is very useful when the homeowner wishes to raise funds and the first mortgage secured on the property has charges to change. This is not always the case and it is highly recommended to seek independent professional advice before you decide the best route to follow.
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 your 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.
Choosing a loan
This is no easy task as there are so many different options open to the majority of applicants. Be sure you know how much you feel comfortable in repaying each month and seek independent professional advice as to the best loan to suit your needs.
Need some assistance
If you think this type of loan could assist you with your future planning make sure you get the right one to suit your needs. There are many different lenders offering numerous second charge loans so please do call our independent advisers who will be happy to help.