Second charge loans, a new era of lending

The second charge loan market has recently been hitting the headlines revealing large increases in application and completion levels.

In years gone by the process of a second charge mortgage had been very different and proved very confusing to most homeowners. Borrowers clearly did not fully understand how a second charge loan worked or how to go about getting the correct information.

One of the factors behind the escalating growth of this sector is driven by the sky-high interest rates charged by the unsecured lending market. In light of the recent lending figures it is clear regulation of the seconds market has resulted in intermediaries considering second charge mortgages more closely as a practical solution to client’s needs.

MCD regulation has helped align second charges to the mainstream mortgage market and opened up more choices for the borrower. As a result, the division between first and second charge lending has become far narrower.

Resurgence of secured lending

Although regulation has been a contributing factor, it is felt within the industry that the commitment from the lenders to engage with the intermediaries will be instrumental in the long-term success. Because of this new found understanding more and more intermediaries/brokers have a deeper understanding of second charge lending and the potential benefits it offers clients. It is therefore little surprise that second charge lending has begun to see record levels of completed business.

The way forward

Second charge loans do not suit every need and it is vitally important any potential client seeks the correct advice from a professional qualified adviser. If you would like to know more please do not hesitate to contact us.