Value of professional broker advice

Almost nine out of 10 Second charge loan applications through an intermediary (broker) resulted in an offer in 2017 – up from seven in 10 in 2016. What is more four in five of those offers went to completion, up from seven in 10 the year before.

In particular second charge borrowers have benefited from widely available and competitively priced deals. This is a tribute to the lenders who have expanded their portfolios of loans available to the majority of homeowners.

With the Bank of England base rate on a slow upward trajectory, lenders remain firmly focused on rigorous affordability tests so that borrowers do not overstretch themselves to achieve their ambitions. Brokers are very positive about future prospects, as two thirds said they were very confident in their own business’ activity for 2018.

The rise of lenders willing to help second charge borrowers and greater innovation in the market means more and more borrowers are securing cost effective loans to meet their needs. There are still several obstacles to overcome and it is vital for lenders to continue to innovate and adapt criteria to meet the changing needs of the second charge borrower.

If you are looking to take out a loan in the near future, you should keep in mind that interest rates are likely to increase sooner rather than later. Careful consideration should be given to fixing your rate and a broker will explain all the pro’s and cons helping you make the correct choice.

Help required?

If you would like to discuss your lending requirements, please do make contact and one of our advisers will be happy to assist.

Second charge loans gaining momentum

Brokers and lenders alike have welcomed the Bank of England’s latest figures clearly showing second charge lending hitting an all-time high.

The figures highlight new and existing buy-to-let investors have raised the required deposit levels by taking out second charges on existing property holdings. Landlords have been hit from all angles of late, but this doesn’t seem to of dampened their enthusiasm.

2018 has started well with brokers reporting a steady rise in both applications and completions compared to the same period last year. A broker in Sussex commented “second charge lending has in our view taken off in a big way”. “Seconds offer speed, flexibility and decent interest rates for all homeowners wanting to raise funds”. “Since regulation lenders have reduced set up costs and interest rates”.

Second charge lending is increasing its popularity month on month. When you compare the interest rates on offer to unsecured lending it is very evident why this form of fund raising is growing in stature. Lenders have been quick to recognise the increase in popularity and have responded in a very positive manner with a wealth of new and innovative products.

There are many advantages that a second charge loan offers, not least the quick turnaround time which can be as little as 15 working days. This of course is a great deal faster than a standard re-mortgage which can drag on for months and months.

Lenders are reporting the largest growth area of this type of funding is via the self-employed workforce which includes landlords. Raising funds for the self-employed or contracted worker can be a challenge indeed but second charges do offer far more flexibility, so they are worth exploring.

Can we help?

If you are considering raising funds on your property, please do contact one of our fully qualified advisers who will guide you in the right direction.

Borrowing money can be so confusing.

Raising funds at any time in life especially nowadays can be very daunting and expensive if you get it wrong. There will be various reason you need to raise cash and many options open to the majority. First piece of advice to heed is to get professional advice as the wrong loan over a period of time could cost thousands more than you need to pay.

Generally, a second charge or secured loan will be cheaper than one unsecured but again please seek advice as this is not always the case.

Using a reputable broker will help eliminate a lot of the questions as they are experienced with all types of lending.

Some reasons why a second charge could be right for you:

  • When you want the money quickly! 

Secured loans can be quick to set up, and in some cases where the loan to value is low and a valuation isn’t necessarily required, money can be released very quickly. Usually however, this process can be longer and may take a week or so. Generally, the time from application to money in account is a great deal quicker than a re-mortgage.

  • When you’re struggling to prove your income 

For self-employed applicants looking for a first charge mortgage, it’s currently possible to get a mortgage with one or two years accounts as an absolute minimum. For secured second charge lending things can be more flexible and certain lenders will accept business turnover, and even 9 months bank statements as proof of income. This is helpful for those who have recently gone self-employed or changed trading style.

  • When you have more severe credit history that mortgage lenders won’t accept. 

At the moment, main mortgage lenders can be quite flexible with their criteria when it comes to poor credit mortgage lending, accepting bankrupt or customers with CCJs etc. so long as they have the right equity and income. With secured lending however, there are certain lenders who will consider a much wider and severe range of credit issues, often at higher loan to values.

Help required?

If you are looking to raise money from the equity within your property, please make contact and one of our advisers will be pleased to assist.

Second charge loans set to increase

The first reports on second charge financing of 2018 are suggesting that the rise in new business numbers recorded in 2017 will continue in 2018.

However, it is felt that the increasing popularity of secured loans did not happen without a lot of effort from brokers and lenders alike. What the new figures don’t reveal is just how much arduous work has gone into building business volumes by awareness. The second charge industry should be particularly proud of how it has succeeded in promoting secured loans to brokers and the public.

It is believed that the sector is more likely to grow at a measured pace rather than a “boom & bust” situation, backed by the increasing numbers of advisers who are now aware of where secured loans can sit in their advice process.

If you look closely at the positives a secured loan can offer a borrower, then it is easy to see why this form of lending is being welcomed by all.

Lender choices

The last 12 months has seen a substantial increase in the number of loan types available to a property owner. Not only this but new lenders have entered the market which has to be good for the long-term growth and stability of the second charge industry.

The broker

These days due to the vast choices open to the prospective borrower it is vital they get a professional adviser to point them in the right direction. With so many loans and re-mortgages available anybody contemplating taking out loan would be very well advised to seek broker advice.

Can we assist?

If you would like to discuss your future and present borrowing needs, please do make contact and one of our qualified advisers will be pleased to help.