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.




Second charge loans on the increase

The number of loan applications has seen an increase of nearly 23% in the quarter ending March 2017 compared to the Q4 ending December 2016. April and May have continued to increase as consumers become more aware of how a second charge loan could benefit them.

It would seem the UK public are keen to reduce expensive debt (credit cards and un-secured loans) so as to free up monthly funds.

Why choose a second charge loan?

  • Faster to complete than a traditional re-mortgage.
  • Normally less fees.
  • Very attractive interest rates.
  • Loans are very flexible.
  • Ability to retain current mortgage deal if on a low rate.
  • Helps the self-employed

Choosing a lender

There are an increasing number of second charge lenders entering the market and choosing one can be a minefield, getting professional help selecting is highly recommended. A broker will take time to understand your needs and be able to place your application with the lender matching your requirements. This is vital as selecting the wrong loan or lender could be very expensive in the long term.

Like too know more?

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



Completion time for second charge loans

2017 has seen a significant decrease in the completion time for second charge loans which is great news for the industry on the whole. Confidence is growing rapidly in this type of lending as the general public see the benefits it has to offer.

A reduction in completion time is a deal is good news for the borrower, we can confirm our records show that to date this year a 18% reduction has been achieved. The important thing is the lenders we use are still looking for ways to reduce the time even more, this just goes to prove how serious they are about this type of business.

This year has seen a significant increase in the second charge market as more borrowers look to secure faster financing for their upcoming projects. Traditional high street lenders still are lacking the ability to compete with seconds financing for speed and efficiency.

Options expanding

As more people use second charges so the products increase, over the last 2 years we have seen a steady increase of deals on offer. This unique type of lending is most certainly far more flexible than the majority of re-mortgages that are available.

All this spells good news for the borrower as the product choice and options expand plus the costs are reducing.

With so many substantial changes taking place on a rapid scale it is without doubt best advice to seek help before you make any decisions regarding your future financing. This course of action could well save you thousands of pounds in the future.

Can we help?

If you require any assistance with your future financing please call one of our experienced advisers, we are here to help.