Alternative To A Re-Mortgage

Why choose second charge:

Second charge loans can be a real alternative to a re-mortgage. While every application needs to be considered on its own merits, the second charge industry has recently become far more competitive and attractive.

Why you should consider a second charge:

  1. A) Keeping your existing low rate mortgage.

You may have a very low rate lifetime tracker first mortgage. Many lifetime trackers were sold a number of years ago with some lenders offering rates of 0.25% (or lower) above BBR. You may have explored the current market and it is not possible to re-mortgage to an equivalent or lower rate.

This is clearly a scenario where a second charge loan should be considered. For example, if you have a base rate tracker mortgage of 150k at a rate of 0.75% (0.25% above base rate) and want to raise £30k, it is more likely that a second charge loan is a better option than re-mortgaging.

  1. B) Avoiding early repayment charges.

If you face high early redemption charges (ERC) on your first mortgage in the next 2 years.

Rather than re-mortgage and pay high (ERC’s), it may be beneficial for you to take out the required additional borrowing by way of a second charge loan. You can then consider a re-mortgage when the (ERC’s) no longer apply.

  1. C) Further Advance is not available

You may have approached you existing first charge lender for a further advance, but have been unable to obtain the amount required.

The first charge lender may have declined a further advance for a number of reasons. Typically this might be due to insufficient income, adverse credit or simply because your first charge lender is no longer lending. Second charge lenders often have a different approach to assessing income and adverse credit. If a client is clearly benefiting from the loan and more importantly can afford the loan, lenders are prepared to look at individual applications on their own merits.




Second Charge Mortgage For You

Can I get a second charge mortgage?

You do not necessarily need a very good credit score to get a second charge mortgage. In fact, in some cases, you may still be able to get a second mortgage with a bad credit score.

Obviously, in order to be considered for a second mortgage you need be a homeowner. However, you do not necessarily need to be living in the property you are taking out the second charge mortgage on.

There are a few reasons why you might want to take out a second charge mortgage, but before you determine whether or not you can get one, weigh up your options.

If you have been considering taking out a second mortgage, the first thing to do is to decide how much money you need, and what you will be spending it on. You may be able to look at other ways of borrowing money with less risk attached. For example, if you are looking at borrowing a few hundred up to a couple of thousand pounds, then you may want to get a credit card. Some 0% purchases credit cards will allow you to avoid paying any interest for up to 18 months, and sometimes longer.

The main attraction for a second charge mortgage is that people who have a less than perfect or bad credit score can still be in with a chance of being approved. If your application is successful another advantage is the speed of advancement, this could be as little as 20 working days.

Also, it might be easier to get a second charge mortgage, even if you have a fluctuating income, or are classed as self-employed.

Need some help?

If you require assistance choosing your loan please contact one of our fully qualified advisers and they will be happy to help.

Rising Second Charge Loans

Second charge on the up and rising: 

Second charge lending activity has seen a definite surge in recent months, driven by record low rates and rising house prices, which have encouraged homeowners to reconsider their finances. So much so, that the number of second charge loan transactions has risen to the highest level seen in over five years.

This highlights the level of motivation to raise capital at the moment, and our own figures back this up. Second charge lending is now a big part of the lending markets with more borrowers considering this type of loan as an alternative to a re-mortgage.  Indeed, additional figures from a survey revealed that 7.8% of homeowners in August and September this year applied for a secured loan against their property.

Since the Brexit result a pattern has emerged with homeowners looking to reduce expensive long term debt such as credit cards and unsecured lending. Homeowners are without doubt being more cautious as the immediate future is somewhat uncertain and they see reduced expenses as a major priority.

Second charge loans now have a vast array of choices so if you are considering a loan please ensure you get the right one to meet your needs both in the short and long term.

Can we help?

We have a large number of fully qualified advisers so please do make contact and we will endeavour to find the perfect solution for your needs.


Popular Second Charge Loans

Second charge lending ever more popular:

A recent survey has found nearly one in six self-employed workers has had a re-mortgage application rejected. The findings highlight the problems of proving income and affordability for customers who are not full-time employees, according to the survey.

Despite their self-employed status, nearly half (48%) of respondents said they earned about the same or more than in their previous job, 26% said they were earning more.

Self-employment is growing rapidly and being your own boss should not mean you cannot successfully apply for a re-mortgage. Many self-employed need to raise cash for business expansion as well as the normal home improvements.

One solution to the self-employed plight is a second charge loan which is growing in status month on month. This type of loan has several advantages over a re-mortgage and its little wonder they are growing in popularity.

The key to ensuring that you do not struggle in vein searching for the right loan to meet your needs is to get expert independent help. The range of loans open to the self-employed are vast and an expert will help guide you to the correct solution.

Can we help you?

If you are looking to secure a loan on your property please do contact one of our advisers and they will be happy to assist.



Help for the Self-employed

Help for the self-employed
Currently, the second charge lending market offers a good alternative to self-employed borrowers, in particular for those with little track record or complex income structures. Products are out there whether the client has just one year of trading or is well established in their business.
Lenders are softening in their approach to the self-employed and Its believed the market will continue to grow in supplying products for this often underserved sector of the market.
The self-employed and, in particular, contract-type work does from time to time mean that the applicant will be between projects and, as such, income volatility becomes a factor.

There is a real case for products that allow for payment breaks to accommodate this along with perhaps the ability to overpay throughout the term without penalty. Lenders have seen the need for such plans and have incorporated deals in their portfolios which is good news for the self-employed.
There is likely to be more self-employed, freelance and limited company owners in the years to come. It is very encouraging to see the lenders taking on board this situation and acting in a positive manner. Small and medium businesses are making up an ever-increasing part of the British economy and, as such, it is imperative that this sector is supported appropriately.
Need some help?
If you would like to know more please do contact one of our qualified advisers and they will be pleased to assist.