Second charge interest rates are holding firm at present

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, there is a feeling amongst the experts this trend could soon be reversed.

Second charge loan interest rates have been tumbling for months now. A second charge loan could be used as an alternative to a re-mortgage if it fits your lending criteria.

Second charge lending is now a serious alterative to the once traditional re-mortgage.

One thing you should do if you are contemplating taking out a new loan is to consult an experienced professional independent adviser as this form on loan will not suit everybody.

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. More and more innovative products are coming onto the market all the time which has to be good news for the consumer.

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 expensive over the longer term so do seek independent professional advice.

Need some assistance?

If you think this form of loan could assist you in your future planning, please call one of our independent advisers who will be able to guide you in the correct direction.

Second charge lending in November last year came to £137.8m

This is an increase of 11.5% on October’s figure and is the second post-credit crunch record breaking month in a row.

In fact, it’s accurate to say that second charge lending is witnessing its highest period of lending (Q4) since 2008.

In November, over 3,000 loans were written for the first time since 2008, making for a year-on-year increase of 1,000 loans – itself another record.

And second charge lending hit £1.06bn on an annual basis, the first time it has passed the £1bn watermark since 2019.

The only sore spot is completion time slowing by an average of 5.2 days over the month, coming to an average completion time of 22.6 days. It’s widely considered that lenders’ service levels are being met and the increase is more reflective of delays caused by the Land Registry backlog.

Re-mortgage v Second charge


So, why would one opt to take the second charge route rather than re-mortgage?

Lots of reasons actually. For example, many customers have a really good first mortgage deal, maybe a great fixed or tracker rate that they don’t want to give up. Taking a second charge at a higher rate may mean that the blended rate across the whole debt is still lower than a new first deal; so a second charge loan can make good financial sense

.

Some borrowers may face a stiff early repayment charge on their first mortgage if they re-mortgage totally. Others may have had a change in their circumstances which means switching to a bigger first charge mortgage is not an option. Perhaps they started a family or changed jobs resulting in a different source of income. Let’s not forget, second charges can be considerably quicker to complete than re-mortgages.

Like to know more?

If you would like to know more about second charge loans please do make contact and one of our advisers will be happy to assist.

Second charge lending is becoming more popular than ever before

There has been a flurry of activity in the second charge loan sector recently as lenders look to re-price their products downwards. We are pleased to inform you second charge loans are at their lowest rates the sector has ever seen.

Great news for borrowers indeed, this is without doubt one of the contributing factors to second charge’s rapid growth over the last five years. This type of loan has been getting less expensive as competition for business intensifies, plus new funding sources are coming into the market rapidly.

Lenders are now looking for ways to attract more business and we are now seeing a lot of new offers creeping into this expanding form of lending.

Speed of funding is crucial, second charge loans will deliver

We are always asked with virtually every case we do “how quickly can this be done”. The answer is every case will vary due to the complexity of the deal. The average time currently to complete on a “straight forward loan” is 18 working days.

To help complete the case quickly clients should follow these golden rules.

1}         Good fast communication.

2}         Online contact details.

3}         Return applications rapidly.

4}         Easy access to the property for the survey.

5}         Internet access.

Need some advice

If you require assistance with your next loan please do call one of our expert independent advisers who will be happy to help.

Landlords – The place to be for stability

The Buy to Let City Tracker provides landlords with an insight into the UK’s best investment hotspots by analysing five key indicators which impact the desirability of locations.

Analysis takes in the average total rent, the best short-term returns through yield as well as the long-term return through house price growth over the past decade.

Aldermore also looks at the lowest number of vacancies as a proportion of total average total of total housing stock and the percentage of the city population in the rental market.

The city which emerged as the number one city, considering all these factors, was Bristol which has risen to the top spot because of the long-term growth of property values in the area along with the lowest number of long-term property vacancies out of all the 50 locations analysed.

Indeed, only 0.6% of rental properties were vacant in the city.

Bristol knocked Manchester off the top spot and down to position four on the table whilst Oxford and Cambridge took second and third places respectively.

London, which ranked third last year, has moved to sixth place on the list but, according to Aldermore, continued to be an attractive investment due to the long-term outlook for property prices, market potential, and relatively high proportion of private renters.

A new entrant to the top ten was Luton, which has risen from 12th to fifth place in the rankings because of the relative improvement of long-term house prices.

It recorded 5.2% year-on-year house price growth over the last decade, and now has the strongest property price growth of any of the 50 cities, Aldermore said.

The City Tracker shows the UK housing market is rich with diverse and unique conditions across the regions that are ripe for investment opportunities.

As we move towards a post-Covid environment, we hope this analysis gives food for thought to many landlords on where to look for those hidden gems and returns that meet their business strategies.

Private landlords are a central part of the housing market, supporting over 4.5 million households in the UK and, as we emerge from the pandemic, landlords will need to meet the emerging demand for choice and variety from renters.

With the economy opening up and EPC rating changes coming in 2025, now is a great time for landlords to talk with their broker to review where they want to take their portfolios in the future.

Second charge loans & consolidating debt to ease pressure

Covid-19 has left many people financially worse off with debts increasing.

One of the many advantages of debt consolidation 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 debt consolidation. 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.

Vitally important – get professional advice!

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

Second charge lending reached £123.6m in October, an increase of 74% from £71m the same month last year

October lending was 12% higher than September’s figure of £110.2m, taking the total for 2021 up to £924.6m, meaning it is “almost guaranteed” to surpass £1bn by the year end.

The number of completions jumped 56% year on year to 2,839 in October, marking a new record.

Lending was boosted by new entrant Selina Finance and the removal of almost all pandemic restrictions.

More choices in the second charge market

It is without doubt that secured lending popularity is increasing on a daily basis. Second charge mortgages have increased month on month and continue to do so.

Before you take out a loan of any kind make sure you check whether this form of lending could help you.

Unsecured lending (payday lenders) is so expensive when you analyse the annual interest rates on offer. Homeowners are waking up to this fact and switching to the cheaper and safer secured lending option. 

The largest growth area of loans is to the self-employed and the good news is there are plenty of different plans to suit each individual case. Loans can be fixed for various terms which can give peace of mind, or you may wish to just take the standard discounted variable rate.

Second charge lending is so easy and quick to secure, lenders are increasing their portfolios at a rapid rate. An average case presented will complete in approximately 18 working days, as you can see this is so much quicker than the standard re-mortgage.

Need some assistance?

If you think this type of loan could assist you in your future planning it is particularly important to ensure you get the correct deal 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 you achieve the correct loan for your needs.

October lending was 12% higher than September’s figure of £110.2m, taking the total for 2021 up to £924.6m, meaning it is “almost guaranteed” to surpass £1bn by the year end.

The number of completions jumped 56% year on year to 2,839 in October, marking a new record.

Lending was boosted by new entrant Selina Finance and the removal of almost all pandemic restrictions.

More choices in the second charge market

It is without doubt that secured lending popularity is increasing on a daily basis. Second charge mortgages have increased month on month and continue to do so.

Before you take out a loan of any kind make sure you check whether this form of lending could help you.

Unsecured lending (payday lenders) is so expensive when you analyse the annual interest rates on offer. Homeowners are waking up to this fact and switching to the cheaper and safer secured lending option. 

The largest growth area of loans is to the self-employed and the good news is there are plenty of different plans to suit each individual case. Loans can be fixed for various terms which can give peace of mind, or you may wish to just take the standard discounted variable rate.

Second charge lending is so easy and quick to secure, lenders are increasing their portfolios at a rapid rate. An average case presented will complete in approximately 18 working days, as you can see this is so much quicker than the standard re-mortgage.

Need some assistance?

If you think this type of loan could assist you in your future planning it is particularly important to ensure you get the correct deal 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 you achieve the correct loan for your needs.

2nd Charge lending is very popular

When the pandemic took hold last year, a host of second-charge lenders pulled back on their lending. As a result, the market struggled. However, there’s no denying that the second-charge market is now booming. In fact, the latest figures from the Finance & Leasing Association show that in September this year new business agreements jumped by 67% to nearly 2,500, while the value of new lending increased 78% to £102m.

These aren’t one-offs either. In the three months to the end of September, both the number of new second-charge agreements and the value of those deals are up by more than 100% on the same point last year, while on an annual basis they are both up by more than 10%.

There is a pretty clear message there. Not only has the second-charge market bounced back from the challenges of COVID, but it’s also now at pre-pandemic levels. What’s more, the momentum isn’t ending – the FLA said it fully expects new business volumes to grow over the remainder of the year as demand is so solid.

Changing circumstances

There are plenty of different reasons for why the second-charge sector is looking so positive at the moment, but the strength of that demand from borrowers is a significant one.

The last couple of years has had a real impact on the finances of millions of homeowners and making use of the biggest asset they own – their home – in order to correct that makes sense.

It’s no secret that scores of clients have taken on additional forms of debt to get through the pandemic, but now that the economy – and perhaps their personal circumstances – look to be on an upward trajectory, they may want to explore their options for consolidating those debts into a single monthly payment.

Equally, there will be plenty of homeowners who have realised their current home doesn’t quite meet their needs, but they don’t have the appetite – or the funds – to purchase a new one, and so instead want to improve what they already have.

It may be converting an attic to build a new bedroom for a growing family, or perhaps adding an extension which can serve as a home office now that they spend a portion of the week working from home. That sort of home improvement project will likely require some serious funding too.

Second charge loan/mortgage explained

A mortgage is no more than a secured loan against an asset by way of a lien. A second charge works in exactly the same way.

In other words, a lender loans money to a borrower so that he / she may buy a property. The loan is conditional upon a variety of terms, one of which is the defined collateral for the debt. In this instance, collateral is another name for ‘security’ and this is secured by way of a lien.

The registration of a loan against a property’s title is referred to as a ‘charge’.

Most properties have only one debt registered against them (because most people take out only one loan when purchasing a property) although sometimes a borrower might extend or add to his or her mortgage during its term in order to raise money, perhaps for a home extension – or a child’s wedding.

From time to time, a homeowner might be unable to raise money through their primary mortgage lender due to their circumstances or the criteria set by the lender. In these cases the homeowner may wish to borrow money, but he cannot borrow it from his existing lender. In these circumstances, it is possible to raise more money by way of a secured loan, with a different lender. It is normal for the new lender to take a second charge against the borrower’s property.

A second charge is a secured loan, but it will have less precedence than a first charge. If the borrower defaults on either the first or second charge, either lender can instigate repossession proceedings. However, the first charge lender gets their money first, and there may not be enough money left to repay the second charge lender. In this case, the lender will have to look at other ways to reclaim their outstanding debt.

Re-mortgaging? take a look first.

Before you decide to re-mortgage do take time to explore the benefits this form of lending can offer. Second charges will not suit every situation, but it is worth getting professional advice to see if this could help you.

Who can benefit from second charge lending:

  • First charge has a tie-in period and has penalties to change
  • Funds required very quickly
  • Have been in arrears with your current lender and want to avoid disturbing your current low rate for a sub-prime mortgage
  • You have an interest only mortgage and you do not wish to re-mortgage to capital & repayment
  • You are benefiting from a low interest rate and do not wish to disturb the current product

Most common reasons for a second charge loan:

  • Want to consolidate outstanding loans and credit cards
  • Want to carry out home improvements
  • Want to inject cash into a business venture
  • Have had adverse credit and wish to speak to a company who understands the situation
  • Are self-employed and wish to raise finance for one of the above

Can we help?

If you would like more information on how this type of loan could help you please do contact and one of our advisers who will be happy to assist.

Second charge lending continues expanding to meet needs

The majority of homeowner at some stage of ownership will want to raise extra cash for a venture they have in mind. Raising those funds can be very confusing as many people just do not understand what options are available to them. Ever more popular these days is to raise funds secured on the family home, known as a second charge which is a loan that sits behind the current mortgage secured on the property.

 Second charge market  

Much has been said about the upward trend of the second charge sector over the past year. Brokers and clients alike continue to be surprised at how competitive the rates of interest are plus the wide range of products on offer.

Currently the interest rates on offer are very competitive with some lenders offering the potential to secure even cheaper rates based on risk, second charges provide a valid alternative for clients looking to raise additional funds against their property.

Getting advice is absolutely essential

Very simply the best thing to do if you wish to borrow money is to get independent advice from a fully qualified broker, the independent broker will have access to all loans available to you and will guide you in the correct direction.

Range of deals on offer

Not so long ago in the “seconds market” there was not even a fixed-rate option available, with every second charge product at the lender’s standard variable rate. The fact that discounted and fixed rates have been added to product ranges is testament to the progress of the sector in a relatively short period.

Help?

If you are looking to raise funds against your property please make contact and one of our fully independent advisers will be happy to assist.