Booming! Second charge business increase

Second charge business has increased by around a quarter year-on-year a new report just released shows.

From May to July 2017 there were 2800 second charges written  worth £270m, an increase of 24% and 27% compared to the same three months last year. The latest figures show that more customers are taking out a second charge mortgage – for example to fund renovations or help family members with a deposit for their first home.

In July alone there were over 1900 deals worth £90m, a year-on-year increase of 24% and the upward trend is continuing. The £90m July total still represents a fall from £94m in June.

While the ongoing political and economic uncertainty may have had some effect, it’s important to remember the summer months are traditionally a quieter period for activity, so it will be interesting to see what happens in the winter.

The market is robust, demonstrated by four consecutive months of growth, so it looks like lending will continue upwards for the remainder of 2017.

In order for the sector to reach its true potential, it’s hugely important that awareness and availability of second charge loans improves among all concerned. This will help homeowners secure the most suitable financing for their needs in the longer term.

Interest rates remain low at present but its anybody’s guess how long this will be the case.

Can we assist?

If you are looking to raise funds from the equity within your property do make contact and one of our advisers will be happy to help.

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More looking to second charge lending.

Tougher lending rules are forcing more homeowners to turn to second charge loans to fund home improvements, such as extensions, and to consolidate expensive debt.

Industry figures show a 28% rise in the sums borrowed this way in the three months to the end of July against the same period last year.

The rise in second charge borrowing – so called because the lender is second in line for repayment behind the mortgage provider if a borrower’s home is repossessed – has been fuelled by rising house prices and the squeeze on household budgets.

The attraction of a second charge lending.

Mortgage rules have become much stricter in the past couple of years, with lenders applying tougher “stress” tests to make sure borrowers can meet repayments if interest rates rise. The consequences of this action are that you may not be able to secure extra funds from your original lender.

Some lenders will consider certain borrowers too risky to increase their loans.

But some borrowers also prefer to leave an existing mortgage in place because they would lose an attractive interest rate if they re-mortgaged, or there might be a steep exit penalty for switching.

By taking out a second charge loan with a new provider, your first mortgage is unaffected, but you need to tell the original lender.

A second charge loan may suit borrowers who have had payment problems, for example due to job loss or illness. These homeowners are often refused an increase on their first mortgage, but a specialist lender will most likely take a different view. More can be borrowed with a loan secured on a home than with an unsecured loan. Personal loans from high street banks are usually limited to £25,000.

Help?

If you want to raise capital using your home please do make contact and one of our advisers will be happy to assist.

 

Second charge applications on the Increase.

The number of loan applications increased by nearly 22% in the month ending July 2017 compared to the same period last year. There has also been a significant increase in the value of applications for second charges in 2017 compared to 2016.

Our finance director commented “I’m not surprised at these figures as second charge lending has a lot to offer the homeowner”. “If you compare a secured loan to an unsecured loan these figures are more than justified”. “Interest rates are at an all-time low and the diverse types of loans on offer will fit most needs

Increasingly borrowers are seeking alternative finance when a conventional re-mortgage is not suitable. This could be due to the current mortgage having early redemption penalties or the current loan being on an advantageous interest rate you don’t want to change.

When should you consider second charge lending?

Second charge loans can be used for many reasons, such as a deposit for a new property investment, buy-to-let and re-development of an existing property to name but a few.

Many borrowers now are also viewing second charge loans as a simple and a cost-effective alternative to mainstream lending.

Second charges are fast and can complete in a matter of days as opposed to months on a re-mortgage.

Can we assist?

When taking out a new loan you should seek professional advice, we have a team of experts waiting to take your enquiry so please do make contact.

 

 

 

 

Second charge rates are still low

For the time being second charge interest rates are likely to remain at their all-time lows. If you are considering a new loan now could be the time to make your move as things could be changing soon.

Second charge loan interest rates have been tumbling for months now. This type of loan could be used as an alternative to a re-mortgage if it fits your lending criteria. Second charge lending is growing in stature and is now a very serious alterative to the once traditional re-mortgage.

Lenders have seen the potential growth in this area of raising funds and have responded well by offering competitive short and long-term packages to suit the majority of requirements.

This form of loan will not suit everybody but it is without doubt worth exploring with the advice of a qualified adviser. Remember this is a secured form of lending and therefore will in most cases be far cheaper than an unsecured loan.

These days the choices of loans open to homeowners is vast and it is vital to get the correct one to suit your needs. Making the wrong choice could prove to be very expensive over the longer term so do seek professional advice.

Need some assistance?

If you think this form of loan could assist you in your future planning it is very important to ensure you get the correct advice. There are many lenders offering numerous second charge loans, please call one of our advisers who will be able to guide you in the correct direction.

 

Continued growth second charge mortgage market

June saw the second charge mortgage market have its fourth consecutive month of growth, with new business up 33% by value and 22% by volume.

The number of new second charge mortgages in the first half of 2017 was 10,401, 11% higher than in the same period in 2016.

Second charge mortgages can be particularly useful when a homeowner wants to raise additional funds but does not want to change their existing first mortgage – especially where this involves additional costs. They are regularly used to fund home improvements.

The second charge market is performing very strongly, with four consecutive months of growth highlighting the sectors robustness. Consumers and investors have been hit by rising inflation, and this hasn’t been helped with the ongoing political and economic uncertainty following the General Election and current Brexit negotiations. However, this doesn’t seem to have deterred borrowers looking for alternative routes of financing.

The second charge market offers speed and flexibility coupled with very competitive interest rates, its little wonder consumers are taking to this route of financing.

With the market continuing to accelerate, it’s very important that awareness and availability of second charge loans improves among brokers and consumers alike to help them secure the most suitable financing.

Help?

If you would like to know more about the second charge market and how it could potentially help you please do make contact.

Why choose secured lending?

The main reason why people choose secured lending is to save money which we all want to do!

A second charge loan is likely to offer better rates of interest as the loan is secured on your property. Unsecured loans from high street banks and other sources can be notoriously expensive, we have all seen the rates charged by the so called “pay day” lenders.

The reason for a secured loan being more cost effective is due to the lender having to assess the risk. If you are a high-risk borrower they will need to offset the risk with higher interest rates. So, if you offer security, then the risk involved is much lower and the lender will offer far better rates.

This is indeed particularly useful for those special groups such as the self-employed, retired or those who have had past credit problems.

There are many reasons a second charge loan may be preferable over a re-mortgage but there are three key very common factors.

1} Your credit history has deteriorated since you took out your mortgage.

2} You currently have a mortgage with penalties to change.

3} Speed of completion.

Need some assistance?

If you think this type of loan could assist you in your future planning it is very important to ensure you get the right one to suit you. There are many different lenders offering numerous second charge loans so please do call one of our advisers.

 

Second charge loans & consolidating debt

One of the many advantages of consolidating debt is that when done properly it lowers the total amount of interest you are paying. The idea is to consolidate higher interest debts into a single loan with a lower rate. So, the first question to ask is what makes up the bulk of your debt?

If most of what you owe is on high-interest credit cards, you may be a suitable candidate for consolidating debt. Credit card interest rates can run anywhere from 9% to 35% or more. Debt consolidation loans structured as secured loans against property almost always offer significantly lower rates.

Sometimes interest rates and terms are not the two most key factors for debt consolidation. Sometimes the simple matter of needing more money to pay your monthly bills is the priority. So, your next question is whether you absolutely need a lower monthly payment.

Take a look at your budget. If your finances are taken to the brink of disaster every month, you have no room for emergencies or unforeseen expenses. In your case, debt consolidation would also be a good idea if it could substantially lower your monthly outlay. It is better to pay more interest over the long term than face continued problems because you cannot pay monthly bills.

Second charge loans nowadays come in “all shapes and sizes” and there is likely to be one to fit your needs. The crucial thing is to get professional advice as there are so many options open to homeowners.

Can we help?

If you are looking to raise funds on the equity within your property please do contact us and one of our advisers will be happy to assist.

 

 

 

 

Why are second charges growing so quickly?

In these very active times of financing it has become more important to be able to complete a deal on time. Second charge finance is growing in status year on year and is going from strength to strength, delivering funding quickly and efficiently. This is something high street banks and mortgage companies just cannot do on a regular basis.

A recent survey of borrowers clearly shows the most important ingredient in funding a deal is speed of completion and efficiency. The survey showed that traditional lenders are just taking far too long to get funds released and deals falter due to this reason. A new second charge loan can be completed within 25 working days which as we all know is far quicker than any re-mortgage.

One client interviewed said “I have just recently completed on a second charge loan and from start to finish it only took 17 days”. “I would have no hesitation to recommend this type of funding, just make sure you explore all options open to you before committing”.

Second charges offer

  • Fast completion.
  • Flexible repayment options.
  • No exit penalties for early re-payment.
  • Very competitive rates of interest.

Need help?

If you wish to raise funds and need clarity of what can be done call us now and we will be very happy to talk things over.

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Second charges moving forward month on month…

The second charge mortgage market saw a rise in volume and value in May – making it the third consecutive month of growth, according to the Finance and Leasing Association. The value of the second charge market was £88 million in May, up 27% on the previous year.

There were over 1800 new second charge mortgages taken out in the month of May, a rise of 30% on the previous year. Second charge mortgages 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.

Second charge mortgage 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 plus the Brexit vote. Customers are borrowing for a wide range of reasons, including renovating or extending their current property.

The value of second charge business was over £900 million in the year to May.

Despite the ongoing political and economic uncertainty – a result of the snap general election and Brexit vote – it’s encouraging to see the market continue to grow.

The second charge market has come a long way over the last 5 years and now is seen as a very serious alternative to a standard re-mortgage. The product range has increased significantly and now caters for the majority of needs.

Help needed?

If you are looking to raise a secured loan please do get in contact and one of our advisers will be happy to guide you.

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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.

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