Homeowners choosing second charges

Homeowners are increasingly turning to second charge mortgages to raise additional funds without having to change their existing mortgage deal.

The second charge mortgage market saw 27.5% growth in lending and transactions in October compared to the same month last year.

It follows a slowdown in September where figures were largely unchanged from 2016 and continues the significant growth of the sector earlier in the year.

According to recent data, 1,880 second charge transactions were completed in October this year with a value of £85m – up 19% and 20% respectively compared to October 2016.

The figures were also notably up on September 2017 where just 1,580 transactions were completed totaling £72.8m.

Cautiously optimistic

Whether it is to fund renovations, help a family member with a deposit, or consolidate household debts, more borrowers taking out second charge mortgages – many at a higher value – and this has led to a strong year for the sector.

The market is cautiously optimistic that this increase will continue into next year, but it is important that brokers and homeowners are aware of the range of specialist financing options on offer.

A second mortgage continues to be a useful option for customers seeking to raise additional funds without wanting to change their existing mortgage. To find out more you should always contact a professional adviser as the options available are vast and varied.

Can we help?

If you are looking to raise funds secured on your property please do make contact and on of our advisers will be happy to help.


Second charges continue to grow rapidly

The second charge loan industry has seen progressive growth over the past few years, given it used to be a much less visible sector of the lending market.

The facts are the seconds market grew by 31% in 2016, with the total size of the sector reaching record levels. What is even more astonishing when you realise that the industry has nearly tripled in size over the past three years.

2017 is following the same trend with loan applications and completions up 21%. 

The rate of growth is now slowing down somewhat, which is understandable as greater awareness of the industry and the options it provides is now clearer to homeowners than ever before. This is in large down to brokers and alike taking on board the value a second charge loan can offer clients as opposed to a re-mortgage.

The industry’s huge growth shows property owners have become aware of the ways a second charge loan can help their family or business grow. This type of funding is so quick and easy to complete compared to the long drawn out re-mortgage process.

As the second’s sector continues to build on its successes, we are seeing lenders producing more new products to assist borrowers. These are indeed very good times for the second charge industry and all looks well for 2018.

Can we help?

If you require more information how a second charge loan can help you please call us and we will be happy to assist.




Second charge lending, vital comparisons

When borrowing money whatever the most suitable solution may be, the ability to source second charge products for comparison against first charges means you will get the best deal to suit your needs. The key being that all options have been explored, not ignored.

It pays to get professional advice when seeking a loan that will be secured on your property as a bad move now could cost you thousands in the future.  It all comes back to the fact that, if you don’t ask, you don’t get. By not asking the question, you are left in a rather precarious position. An independent professional adviser will have all options open to you and can advise you as to the best solution for your requirements.

Second charge lenders are also indicating they are keen to innovate further and bring products even closer in line to those offered by first charge players. If you add to that a greater degree of flexibility on affordability, you suddenly open up options that previously did not exist via the conventional re-mortgage.

Recent changes introduced by the Prudential Regulatory Authority mean we are seeing more buy-to-let second charge loans due to the affordability stresses that have been put in place. The changes also affect second charges; however, lenders are introducing new criteria all the time, including ‘top slicing’ whereby a client can include their personal income and expenditure to assist with affordability shortfalls.

Yet again, this clearly demonstrates the second’s sector to be forward thinking and unwilling to sit back and just do what it has always done, despite its small size in comparable terms.

The message here is simple: If you are looking to borrow money do not ignore the second charge loan option.