Continued growth

July 2020 saw the second charge mortgage market have its fourth consecutive month of growth, with new business up 19% by value and 14% by volume.

Second charge mortgages can be particularly useful when a homeowner wants to raise additional funds but does not want to change their existing first mortgage – especially where this involves additional costs. They are regularly used to fund home improvements.

The second charge market is performing very strongly, with four consecutive months of growth highlighting the sectors robustness. Consumers and investors have been hit by Brexit and now the Coronavirus, this has not been helped with more recent bad news about a resurgence of Covid-19.

However, this doesn’t seem to have deterred borrowers looking for alternative routes of financing.

The second charge market offers speed and flexibility coupled with very competitive interest rates, its little wonder consumers are taking to this route of financing. 

With the market continuing to accelerate, it’s very important that awareness and availability of second charge loans improves among brokers and consumers alike to help them secure the most suitable financing.

Help?

If you would like to know more about the second charge market and how it could potentially help you please do make contact.

Second charge the better alternative for your loan?

The second charge loan market has recently been hitting the headlines revealing 3-year high lending figures breaking all recent records.

In years gone by the processes for first and second charge mortgages had been very different, and this proved confusing to most people. Borrowers clearly did not fully understand how a second charge loan worked or how to go about finding out what it could do for them.

One of the factors behind the escalating growth of this sector is driven by the extortionate interest rates being charged by unsecured lenders in particular the “pay day lenders”.

In light of the recent lending figures it is clear recent regulation of the market has resulted in intermediaries or brokers considering second charge mortgages more closely. Regulation has helped align second charges to the mainstream mortgage market and open up more choices for the borrower.

As a result, the division between first and second charge lending has begun to be almost non-existent and this can only benefit all involved.

Second charges warrant consideration

It is believed within the industry that the commitment from the lenders to engage with the intermediaries will be instrumental in the long-term success. As a result of this new found understanding more and more intermediaries have a deeper understanding of second charge lending and the potential benefits it offers clients. It is therefore little surprise that second charge lending is beginning to break all records.

Way forward

Second charge loans do not suit everybody, it is vitally important any potential client seeks the correct advice from a professional qualified independent adviser. If you wish to know more please do not hesitate to contact us.

Homeowners are using second charge loans more and more

More and more borrowers are turning to second charge loans as mortgage companies tighten controls on borrowing. Figures just released for the last quarter show “seconds” increasing to homeowners by 21% on the previous year, these increases are likely to be down to tighter controls from high street banks and other traditional lenders.

Brokers up and down the country confirm they are using second charges to assist clients in achieving their targets as high street lending becomes more and more difficult. Lending institutions up and down the country confirm, “secured finance is filling a funding gap which has appeared”. “Borrowers are finding it more difficult to obtain loans from mainstream lenders who are implementing tougher affordability restrictions”.

Some 70% of brokers reported a significant increase in secured loans in the last year and the trend seems to be continuing. Of the brokers survey 100% of them stated they found second charge finance extremely easy to use and quick to complete. One broker in Newcastle commented “We have used “seconds” in the past and now we are using them on a more regular basis”. “Clients in general are impressed with the efficiency and speed of completion a second charge loan offers”.

There is little doubt this form of loan should be taken seriously especially when you compare the interest rates being charged by unsecured lenders.

Like too know more?

If you would like to know more about second charge financing and how it could assist you please do get in contact and we will be happy to help.

second

Is this a loan that could help you?

For some homeowners including landlords a second charge mortgage will be a better option than a re-mortgage, so it’s surprising that so many consumers are unaware of what they are and how they work.

There can be several reasons that a second charge might be the preferred option for a loan you may be considering. For example, you may not want to extend the term on your current mortgage or lose an excellent interest rate you currently have.

Demand for this kind of loan, particularly when it comes to funding home improvements or debt consolidation has increased substantially over the past 2 years. One thing which is very evident is that consumers have become much more aware of just how much they are paying for any unsecured loans they may have.

The vast majority of high street banks and standard lenders still continue to show a reluctance to lend on a second charge basis leaving the door open for the specialist lenders. Second charge finance has provided an invaluable resource to those looking to secure finance for their projects quickly and cost effectively.

These days there are some many loan options available to homeowners it is particularly important to get the correct one for you needs. Always seek professional independent advice before taking out any loan secured on a property you own.  

Why choose a second charge loan?

  1. Faster to complete than a traditional re-mortgage.
  2. Attractive interest rates.
  3. Loans are very flexible these days.
  4. Ability to retain current mortgage deal if on a low rate.
  5. Helps the self-employed

Like to know more?

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

Second charge loans are getting a bigger audience these days

The buy-to-let second charge market provides a range of solutions for borrowers who have perhaps been refused a mortgage by their current lender or high street bank.

Popular second charge lenders are often more flexible in their application criteria and can step in where applicants do not meet the normal mainstream lenders criteria. Landlords can borrow up to 75% loan to value against their buy to let investments with loan repayment terms from 3 – 30 years from a wide range of lenders in this space.

Could this help you resolve your problem 

  • Buy to let Loans accepted for semi-commercial property, flats above shops, non-standard construction homes, HMO and student let properties.
  • First and second charge options
  • Rates from 75% LTV
  • No proof of income or earnings required
  • Proof of rental income from AST acceptable
  • Expat applications welcome
  • No early repayment charges (ERC’s)
  • Raise capital against multiple buy-to-let properties and portfolios
  • No minimum property valuation
  • Loans for Self-employed and professional landlords
  • Applicants with some adverse credit welcome including CCJ’s and defaults

For further key facts and application criteria on these products you should seek independent financial advice.

What lenders are available?

There is a wide selection of lenders who offer secured loans on buy to let properties, many of which however only accept applications via their approved brokers and intermediaries.

Help required

If you would like to know more please make contact and one of our independent advisers will be happy to assist.

Why would you consider a second charge mortgage?

There are a number of reasons to apply for a second charge mortgage and they include.

Debt Consolidation

Home improvements/extensions

Helping with University fees

Helping your family with a deposit for their first home

Buy-to-let property purchase

Children’s tuition fees

Payment of a tax bill

Who can apply for a second charge mortgage?

A second charge mortgage is open to a variety of borrowers including contractors, freelancers and self-employed professionals but there are stipulations.

Firstly, and most importantly you must have an existing first charge mortgage on a property already. You must also be 18 years old and over, as well as being employed (be it in a contract or permanent work).

How do I apply for a second charge mortgage?

The second charge loan application process is similar to applying for a re-mortgage.  An independent broker who specialises in offering second charge products will be able to gain access to a panel of lenders to ensure the quote you get is competitive and applicable to your particular set of circumstances. 

Most second charge lenders only accept business through a registered Broker and in nearly all instances, the client does not need to instruct a Solicitor to act for them, which can help expedite the transaction. This is different to re-mortgage applications where a conveyancer/Solicitor is usually required.

Way forward

Second charge loans do not suit every need and it is vitally important any potential borrower seeks professional advice from a qualified adviser. If you would like to discuss a potential loan please do contact one of our fully qualified independent advisers.

15 months of continued growth.

The second charge mortgage market continues to grow with the value of new business reaching £116 million in November 2019, figures from the Finance & Leasing Association (FLA) show.

This is a rise of 17% from November 2018 with the number of new agreements rising by 14% to 2,594.

In the 12 months to November 2019 new business totalled £1.238 billion, 16% up on the same period the year before while new agreement numbers were up 19% to 27,747.

The second charge mortgage market reported a fifteenth consecutive month of double-digit new business volumes growth in November. The average value of second charge mortgages in November grew by 3% compared with the same month in 2018 to £44,530.

Buy-to-let landlords

Landlords beginning to utilise this method of raising capital which just did not happen in the past. Landlords with good equity within their properties have seen this route of raising capital as quick and very uncomplicated.

Lenders have seen the potential growth in this area, and they have responded very well, offering a good range of flexible loan deals on Buy-to-let properties. Two or three years ago there was only a small choice, plus the rates were a lot higher.

In the years gone by if a homeowner or landlord wanted to raise capital from the equity within their home brokers invariably recommended a re-mortgage. This situation is changing as all parties become more aware of the advantages of a second charge loan has to offer.

If you are looking to release funds tied up within your property it is strongly recommended to explore this type of loan as you could save a good deal of money, especially on legal fees.

Can we help?

If you would like to know more about this form of lending please do make contact and one of our independent advisers will be happy to assist. 

Second charge lending has increased!

Second charge lending has increased in the last twelve months, plus the number of homeowners taking out these specialist mortgages increasing by nearly a quarter.

The value of new business in this area of the mortgage market went up by 25.8% to £111 million in February 2020, according to new figures. Meanwhile, the number of new agreements increased by 24%.

The second charge mortgage market remained buoyant in March and April, as monthly new business reached more than £100 million for the second time this year.

Coronavirus – Looking to raise funds?

We are living in very strange times and many things are not clear, if you are looking to raise funds as and when this crisis is over it is strongly recommend getting the “ball rolling” sooner rather than later.

All experts are predicting there will be a huge surge of lending applications later in the year, so getting your requirements in place now would be a sensible move.

So, what are second charge mortgages?

A second charge loan is, quite literally, a second mortgage. It is a loan which is secured against your home in the same way as a standard mortgage. Homeowners can take a second mortgage out with another lender, so you can shop around to find the best deal.

The loan can be used a bit like a re-mortgage or personal loan to raise additional money for things like home improvements.

Commonly they are used by people who are already on a good first charge rate and don’t want to re-mortgage away from this to raise money. Others use it to avoid paying early repayment charges associated with re-mortgaging or because they have experienced credit problems and may therefore find switching to a new deal tricky.

February’s increase in second charge lending marks the ninth consecutive month of new business growth.

Need help?

If you are considering taking out a new loan against your property please get in touch with one of our fully qualified independent advisers who will be happy to guide you.

Why is there such rapid growth for second charge mortgages?

In these challenging times of financing it has become more important to be able to complete a deal within a set timescale. Second charge finance has grown in status year on year and is going from strength to strength since regulation.

A second charge delivers funding quickly and efficiently which is something high street and private banks just cannot do at a competitive rate.

A recent survey of homeowner’s clearly shows one of the most important ingredients in funding a deal is speed and ease of completion. The survey also discovered that traditional lenders are taking too long to get funds released and deals falter due to this reason.

A second charge can be secured on a property and “sits” behind any first charge mortgage both on private and buy-to-lets. A loan without complications can be completed within 14 working days which is considerably less than a re-mortgage.

If you are thinking of reviewing your finances do consider a second charge if a loan is required. Interest rates and conditions are very competitive when compared to a traditional mortgage.

There is little doubt second charge lending has had its most successful year. The good thing about this is the lenders have taken this on board by expanding products to meet the challenges.

These are indeed very progressive times for the second charge finance market as the industry looks forward to 2020 and beyond.

Would you like to discuss your funding needs?

If you wish to raise a loan secured on a property you own please do make contact and one of our independent advisers will be happy to assist.

Home improvements and the second charge

Second charge lending has always been a popular choice for people carrying out home improvements. In many instances, where the improvements are likely to result in a significant increase in the house price, it can be beneficial to take a second charge mortgage to pay for the work and then re-mortgage at the higher property value and, therefore, a lower LTV. This approach could help a client benefit from a lower first charge mortgage rate in the long term.

Payment of a tax bill

At this time of year, we also see demand from some clients who want to use a second charge mortgage to pay a tax bill.

Second charge mortgages are becoming a competitive way for borrowers to raise funds on their existing property and it could be possible for a homeowner to raise a second charge on their residential property in order to fund the payment of the tax bill.

A number of lenders are also offering this type of borrowing as an equitable charge, which can sometimes be processed faster than a traditional second charge mortgage.

Lenders will generally want to know why the client didn’t have provision in place to pay the bill and will look for some reassurance that they are able to pay future bills, but there are more providers happy to lend on this basis.

There are many opportunities where a second charge mortgage could be the most appropriate fund-raising solution. But you should seek independent professional advice before committing as making an error can be very costly over the long term.

Can we assist?

When taking out a new loan you should seek professional independent advice, we have a team of experts waiting to take your enquiry so please do make contact.