Second charge lending has soared in the last year, with the number of people taking out these specialist mortgages increasing by nearly a quarter.
The value of new business in this area of the mortgage market went up by 23% to £108 million in May 2019, according to new figures from the Finance & Leasing Association (FLA). Meanwhile, the number of new agreements increased by 22%.
The second charge mortgage market remained buoyant in May, as monthly new business reached more than £100 million for the second time this year.”
What are second charge mortgages?
A second charge loan is, quite literally, a second mortgage. It is a loan which is secured against your home in the same way as a standard mortgage. Homeowners can take a second mortgage out with another lender, so can shop around to find the best deal.
The loan can be used a bit like a re-mortgage or personal loan to raise additional money for things like home improvements.
Commonly they are used by people who are already on a good rate and don’t want to re-mortgage away from this to raise money.
Others use it to avoid paying early repayment charges associated with re-mortgaging or because they have experienced credit problems and may therefore find switching to a new deal tricky.
May’s increase in second charge lending marks the ninth consecutive month of new business growth.
Back in April the FLA reported a 24% rise in new second mortgages.
If you are considering taking out a new loan against your property please get in touch with one of our fully qualified advisers who will be happy to guide you.