Rise in business continues to be consistent

The Finance & Leasing Association (FLA) has revealed its members new business figures for the second charge mortgage market in May 2017.

During the month, £87m of second charge new business was completed, up 26% year-on-year. For the year to the end of May, £259m has been transacted, at 25% rise on the same period last year.

Second charge new business has ebbed and flowed over the past year, which was to be expected following the significant changes brought about by the market’s transfer into MCOB in March 2016. While the market is still in the bedding-in process, in the first five months of 2017 new business was up 12% by value and 9% by volume.

These figures go to prove the benefits and changes are filtering through to the homeowner, and they are borrowing for a wide range of reasons, including renovating or extending existing properties.

Consumer confidence remained robust in May, and another consecutive month of increased lending is a positive indication that the second charge market is in good shape. Despite the ongoing political and economic uncertainty – a result of the snap General Election and Brexit vote – it’s encouraging to see the market return to the levels seen before the Mortgage Credit Directive implementation.

Can we help?

If you are looking to raise capital from the equity within your property please do get in contact and one of our qualified advisers will be happy to help.


Second charge mortgage, what is it?

Second charge mortgages are becoming increasingly popular with the number of people opting for one at its highest level since 2009. They are also referred to as secured loans. This is because the loan is secured on the property thus making the interest rate cheaper than an un-secured loan.

Second charge loans allow you to borrow a lump sum which you repay alongside your existing mortgage over a fixed term. Many people use them to raise money as an alternative to a re-mortgage.

First charge mortgages are also secured loans for exactly the same reason – it’s just that they are traditionally referred to as a mortgage.

What can I use a second charge mortgage for?

You can use them for a number of purposes without affecting your normal mortgage. A second charge mortgage is extremely helpful if you are struggling to get a personal loan, maybe because you are self-employed.

If you are looking to re-mortgage a second charge mortgage might be cheaper if your mortgage has a high early repayment charge, or you have a particular product you don’t want to lose i.e. fixed rate, discounted rate etc.

Lots of people also use them to fund home improvements and add value to their property.

How do you qualify?

To qualify for a second charge mortgage, you must be a home owner, although you don’t necessarily have to be living there. While a first charge mortgage is based on a number of factors, including your deposit, credit score and ability to pay each month, a second charge mortgage is based on the equity available in your property.

Need to know more?

If you require more information about raising a secured loan please make contact and one of our advisers will be happy to help.


Is it now time to act?

Second charge loans are growing in stature time on time as more homeowners become aware of their vast array of uses.

Recent house price figures are showing a continued increase in property values which is great news for homeowners indeed. With property values increasing this in turn means more free equity within the property to raise capital.

There is a lot of talk within the industry that mortgage interest rates are about to increase and experts are showing concerns homeowners are not ready for this jump. If a rate rise is coming then this will also filter through to the second charge market in due course.

So, if you are looking to raise capital on your properties equity now would be a very good time to start so as to avoid any nasty surprises. A second charge loan has very few restrictions and will complete much quicker than any re-mortgage.

The good news is there are still plenty of advantageous fixed rate second charge loans available but this could change very quickly in these uncertain times.

It is not always best advice to use a second charge loan to raise funds and you should always discuss your needs with a qualified adviser. A wrong move when raising capital can be costly in the long term so please do seek advice.

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Our advisers are fully trained and qualified in all areas finance so please do call us to discuss any requirements you may have.




Second charges forging ahead

We are seeing more and more second charge loans forging ahead. Encouragingly, completions for April alone were £79m – 53% higher than in April 2016.

The sector is pushing to break annual lending of £1bn for the first time since the recession.

Pricing is easiest to change and it has fallen at all LTVs, with starting rates now at a little over 4%. Product diversification is at its highest ever level offering a product to suit the majority of client needs.

Since the MCD, affordability checks have standardised with those of first charges. Prior to this, a major advantage of second charge over further advance or re-mortgage was increased loan-to-income ratios. In retrospect, it seems crazy for a second charge loan, normally with a higher interest rate, to be permitted at higher LTI ratios. But this was a result of softer regulation outside the FCA and the need to offer an advantage over the other options.

Further benefits remain, such as higher loan to value interest-only, lending with adverse credit, unusual property type and no or low early repayment charges, but these are relatively specialist in comparison.

In today’s market, second charges are chiefly preferred for their economic advantage over the short to medium term.

Borrowers who would trigger an early repayment charge (ERC) or lose low interest rates in order to raise capital are better off taking a second charge, then refinancing either once the ERC ends, the current product expires or the Bank rate is expected to increase.

Virtually all second charge lenders have embraced automation now. Calculation of affordability has been hugely simplified and made more accurate, which can be tailored to region, family size and a host of other factors.

Need to know more?

If you would like to know more about raising capital please do make contact and one of our qualified advisers will be happy to help.



Second charges grow rapidly

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

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.



Second charge rates fall again

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.



Consolidate expensive debt

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.



New heights reached with second charge mortgages

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.



Benefits of Second charge loans

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.