SECOND CHARGE MORTGAGES

Finding the right secured loan for you

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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.

About secured loans

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

If you wanted to invest in a buy-to-let property you would need to take out a buy-to-let mortgage, and for some types of business finance you may be better off with a commercial loan.

Should I get a second charge mortgage?

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.

Second charge mortgages and independent mortgage advice

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.

"The advice and recommendations provided were great and really helped us to secure a property and get the mortgage that suited us."

Mrs Z Dillon, Farnborough

See our case studies section for examples where we have assisted our clients. As always, if you do have an enquiry, do not hesitate to contact us.

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