Second charge loans are definitely helping the Self-employed

It has always been more difficult for self-employed people to get a mortgage compared to salaried employees. For that matter second charge loans have historically been somewhat harder to obtain for the self-employed as well.

At the heart of the issue is a tendency among self-employed individuals to not be able to satisfy loan companies looking to placate their own fears that the borrower will not be able to make good on his or her loan.

The good news is that things are changing – at least where second charge loans are concerned. This is particularly welcome news especially in these hard times we are currently living in. First Brexit and now Covid19!

Lenders are changing the way they do business in order to better serve self-employed applicants. For example, one specialist lender indicated that it had reduced its tax calculation requirements while others are changing their income criteria to make it easier for borrowers to document their income.

Second charge lenders can do a lot more to help the self-employed than primary mortgage lenders because they have much more flexibility. They are finally taking advantage of that flexibility to find ways to better serve self-employed borrowers.

Even more encouraging is the fact that lenders are coming up with a lot more specialised product to suit the majority of needs.

Need help or information?

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

Get professional independent help it pays.

A new campaign is being launched very soon to tackle mortgage and second charge loan myths and highlight the importance of professional advice when it comes to taking out a secured loan.

More stringent lending rules are making it tougher to get a mortgage, and yet new research shows that more than half – 58% – of consumers, including many landlords, may end up with the wrong loan, because they are unaware that a mortgage broker can offer a greater product choice than a bank or building society.

This new study found that nearly 30% of respondents thought that brokers and banks have access to the same products, when in fact using an independent broker can give you access to nearly 15 times more products.

When asked whether they agreed with a series of statements about mortgage advice, one in six thought their bank or building society would be able to give them access to the same impartial advice as a mortgage broker.

The Mortgage Myths campaign aims to put the spotlight on misunderstandings like these, highlight the valuable role of independent advice from a mortgage broker and encourage consumers to speak to an adviser about their lending options.

As an industry, there clearly is a significant amount of work to be done to change these attitudes, educate consumers and promote the advantages of using a mortgage broker.

Although some consumers appear to believe they have secured the best deal possible by going directly to their lender, without speaking to a broker they could be missing out on thousands of lending products that might be even better suited to their needs.

Like to know more?

Please do make contact and one of our fully qualified independent advisers will be happy to help.

Second charge loans set to increase

The first reports on second charge financing of 2020 are suggesting that the rise in new business numbers recorded in 2020 will continue in 2021.

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 independent 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 independent advisers will be pleased to help. 

Secured lending, the value of independent advice.

Almost 9 in 10 second charge loan applications through an intermediary (broker) have resulted in an offer this year, this is up on last year’s figure of 7.4 in 10.

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. Using an independent broker will give you a much larger choice of loans to choose from.

Lenders remain firmly focused on rigorous affordability tests so that borrowers do not overstretch themselves to achieve their ambitions. Brokers are positive about future prospects, as two thirds said they were very confident in their own business’ activity for 2020 and beyond.

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.

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 at some stage, especially with the Brexit and current pandemic situation.

Careful consideration should be given to fixing your rate and an independent broker will explain all the pros 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 independent advisers will be happy to assist.

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.