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.
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.