New era of lending:
The second charge loan market has recently been hitting the headlines revealing a 5 year high lending figure which topped 1bn last year.
In years gone by the processes for first and second charge mortgages have been very different and this proved confusing to most people. Borrowers clearly did not fully understand how a second charge loan worked or how to go about finding out.
One of the factors behind this escalating growth of this sector is driven by the looming implementation date of the Mortgage Credit Directive (MCD). In light of the recent lending figures it is clear regulation of the market has resulted in intermediaries considering second charge mortgages more closely. MCD will help align second charges to the mainstream mortgage market and open up more choices for the borrower. As a result the division between first and second charge lending will begin to be non-existent and this can only benefit all involved.
Resurgence of second charges:
Although the directive has been a contributing factor, it is felt within the industry that the commitment from the lenders to engage with the intermediaries will be instrumental in the long term success. As a result of this new found understanding more and more intermediaries have a deeper understanding of second charge lending and the potential benefits it offers clients. It is therefore little surprise that second charge lending has topped the £1bn mark last year and figures show it is likely to be much higher in 2016.
Second charge loans do not suit every need and it is vitally important any potential client seeks the correct advice from a professional qualified adviser. If you wish to know more please do not hesitate to contact us.