Second charges, also known as secured loans, can be useful where you need additional funds at a competitive interest rate.
Your existing mortgage may be on a low lifetime tracker rate, or you may have an interest- only mortgage with an uncooperative lender, or you are simply tied in on your current deal.
They are called second charge mortgages because if you were to find yourself unable to pay your mortgage - or first charge mortgage - that would take priority over the secured loan.
A second charge mortgage can offer more flexibility. The purpose of the secured loan can be varied, it can be used for:
● Business purposes
● Tax bills
● Debt consolidation
● Home improvements
Second charge mortgages have become more mainstream and a more acceptable way of borrowing.
As more lenders have started to offer them, the fees and interest rates have reduced.
Second charge lenders will charge slightly higher rates because they are next, rather than first, in the queue, should you default on your mortgage.
But second charge or secured loan lenders tend to underwrite their mortgage lending on a bespoke basis. This means lenders are often willing to go the extra mile.
As an independent mortgage adviser we provide advice on all types of mortgages.
The Mortgage Credit Directive introduced in 2016 meant independent mortgage advisers have to provide full advice on both first charge and second charge mortgages.
Even before the directive this was something we offered, as we have excellent and long-standing relationships with specialist and mainstream second charge lenders.
We are authorised by the FCA [link to register] to give advice on second charge mortgages.
Mrs Z Dillon, Farnborough
Speed is of the essence in the purchase process and quite often can be a determinant factor for you in obtaining your dream property.
Is now the best time to remortgage? Mortgage interest rates are still historically very competitive and now may be the best time to assess...
Here at Independent James we can provide you with the right advice to maximise your profit potential in a tight rental market. It is well...
We realise the varied nature of your work, and more importantly working hours, can make the simplest of tasks difficult to...
In recent years there has been a shift towards people contracting, with the format allowing flexible working arrangements and often...
As a result of the European Mortgage Directive (implemented on the 21st March 2016) to call ourselves ‘Independent’...