Are you looking for a Remortgage or a Further Advance?
You can count on us to find the right home for your needs.
Thousands of second charge mortgages have been arranged in recent years, from an extensive panel of lenders across the whole of the marketplace.
They can be a great alternative for you when:
You fail an affordability test with your main first charge mortgage lender
You have an Early Repayment Charge on your first charge
Your current mortgage is Interest Only, and any changes would withdraw this option
You are benefiting from an existing low mortgage rate but want to raise capital
You are wishing to capital-raise for business purposes, including deposits for buy-to-let mortgages
You are keen to retain your current mortgage product but now have historic adverse credit.
Additional factors include:
Up to 100% of property value may be possible
Interest rates are comparable with regular mortgage rates
Variable rates and fixed rates are available, fixed for up to 5 years
The loan term may be from only 3 years, running all the way up to 30 years
The loan amount may be from £3,000 to £1,000,000+
You may be an Employee, Self-Employed, Expatriate, Portfolio or first-time Landlord or a Limited Company
There are usually no Early Repayment Charges associated with Second Charge Secured Loans
Any questions? Get in touch today.
Let us say “Yes, we can help” – Have you considered a second charge loan?
Second Charge mortgages can offer the ideal alternative to a remortgage, further advance or unsecured loan. This is why they can be really useful for those who desperately need to reduce their monthly outgoing costs.
Here’s how a customer was helped to reduce their monthly outgoings by £291 a month, in just 6 days from the application being received from the customer:
Unsecured debt balance: £25,000
Average monthly payments: £666
The client needed to consolidate her debts to reduce her monthly payments. In addition, she wanted to finance a new bathroom at a cost of £5,000.
The client did not want to raise additional finance through a further advance, or a remortgage due to the resulting high redemption penalties.
The client had already been rejected for unsecured loans because of her high outgoings.
Plus, the client wanted protection against possible rate increases for 5 years and the ability to overpay without penalties.
In just 6 days, the customer received their funds:
£30,000 over a 20-year period
Monthly payments reduced to £375, which is a £291 reduction in their outgoings each month
Fixed-rate for 5 years
No Early Repayment Charges, allowing them to remortgage later, or make overpayments anytime
With rates from around regular mortgage rates and loans of up to £2,000,000, Second Charges can be used for a wide variety of both reasons, and clients. So why not contact us now?
Let us say “Yes, we can help” – A reduction in outgoings
I would recommend that you take a quick look at some of the key elements below. Perhaps you, your family or friends fall into one or more of these areas?
Here at SUL, I still have access to the largest second charge panels in the marketplace so if I can’t place a case, I doubt anyone can. I remain fully Independent. Feel free to contact me using the details below this article.
For Residential Owner-Occupied Homes
Examples of acceptable circumstances for Contractors and those with short work history:
6 months contract or a rolling 3-month contract renewed at least once
Umbrella companies acceptable
Contracting less than 12 months – Weekly contract rate x 46 (minus expenses)
Only 1-year track record of employment in the same line of work required
Acceptable Properties; usually unacceptable for mortgages:
Ex Local Authority flats/maisonettes
Flats above commercial premises
Flats above take-away, restaurants, pubs
High rise flats and deck access
For those with large families:
Up to 4 applicants accepted with all incomes considered
Second charge applicants do not have to be on first mortgage
Borrowing may run into retirement
Up to age 85 at end of term
Current income used if retirement is more than 10 years away
For cases where Interest Only is preferred:
Up to 60% of property value can be used
An investment vehicle or downsizing may be used as an exit route
An Impaired Credit History is acceptable
Current Debt Management Plans may be considered
Up to 3 CCJ’s and 2 missed mortgage payments are allowed, up to 70% of the property value
Up to 3 missed unsecured payments in last 6 months are allowed
Telecoms missed payments ignored
Buy to Let
Owned personally, by a trading company or an SPV
Portfolios of up to 15 properties
Older or retired landlords – interest only up to 75% of property value and up to age 95 at end of term
Expats – No minimum income required
Impaired credit plans available
HMO’s up to 8 bedrooms and multi-unit blocks up to 5 units
Many independent lenders have numerous individual underwriting niches which on their own are valuable and can fill the gaps on tick-box circumstances.
Let us say “Yes, we can help” – Even more reasons for a secured loan
Second Charge Mortgages can be considered as a viable solution for debt consolidation, and they provide products that are affordable and sustainable.
There are few restrictions on meeting criteria and they can offer full consolidation almost no matter what the level of unsecured debt. This reduces your monthly commitments and outgoings, as many of these debts are a percentage of loan outstanding each month, and often place a financial strain on you.
We can help you on the journey back to high-street lending.
No limit consolidation
Loans up to £1,000,000
Loans of up to 95% of your property value
All credit profiles considered
Here, we don’t rely solely upon generic or data-driven, tick-a-box sourcing systems. Around half of our cases have found a better solution and interest rate by being underwritten manually, compared to those presented electronically, as we have a deeper understanding on the human side of underwriting and lending. Your personal circumstances are always taken into account.
We rely on a team of personnel that are minimum CeMAP qualified (the industry standard) and with a minimum of 5-years experience in second charge mortgages and loans, therefore you can be assured of a responsible outcome.
Let us say “Yes, we can help” – Second charge mortgages
A new lender has arrived, they are offering lower interest rates and are accepting cases that have been declined elsewhere.
The lender is a very worthy contender to the regular High Street names and has formally launched into the second charge loans sector. They have already had a period of market-testing its new products before launch to a wider market.
Here’s why you should consider them:
• Lower interest rates for many customers with credit issues
• No credit score – what you see is what you get
• Sensible affordability calculator
• Underwritten by humans, not a computer
The combination of these factors has already resulted in them seeing a substantial amount of business in England and Wales. They have cleverly identified niches in the market which are underserved by the regular lenders and you can get better rates and a higher chance of acceptance without being tripped up by your credit score. It’s good old-fashioned, common sense, manual underwriting.
When is it time to think of a secured loan? Well, if you thinking of raising money for household maintenance, repairs, extensions or perhaps personal costs or a large tax bill, then, for most people, a remortgage is probably the first thought. Remortgaging has hit a 9-year high and can allow often allow you to switch to a product more suitable for your financial situation, often improving your payable interest rate. However, borrowers with bad credit, very small mortgages or who are self-employed, may discover that the application process and fees incurred from a remortgage can offset these advantages.
A second charge mortgage/loan, often known as a secured loan, is an additional loan paid alongside an existing mortgage, often with another lender being used. So, what are the benefits of a secured loan?
Low Credit Score
Previous or current adverse credit such as County Court Judgments (CCJs) or defaults on payments, will likely cause either a rejection by a lender or higher interest rates when applying for a remortgage. Second charge loans offer a viable alternative for those with adverse credit, as many lenders do not rely on credit scoring alone to approve loan applications – there is a degree of human underwriting involved. They offer a more bespoke approach based on your individual circumstances, which means they can make decisions based on the whole picture providing it can be evidenced that the loan is affordable to you. Second charge mortgages are regulated by the Financial Conduct Authority meaning you are offered the same protections as those provided in connection with first charge mortgage lending.
We have access to a recently launched second charge product from one of our many lenders, that has no minimum credit score, considers each application on a case-by-case basis and accepts CCJs and defaults either below £350 or over 2 years old.
Self-Employed or Fluctuating Income
It can also be difficult for self-employed workers, zero-hour contract applicants or those with a fluctuating income to apply for a remortgage due to the tougher regulatory stance now being taken by lenders, on both income and your ability to repay a loan. As with those with a poor credit rating, second charge loans are often a way of assisting self-employed borrowers providing you are able to evidence your income. We have access to a second charge lender that only requires one year’s self-employed trading history and will consider undistributed profit and projections.
Speed and Cost
Another benefit of a second charge loan is the speed and cost of the application process when compared to that of a remortgage, which could incur large costs such as an ‘Early Redemption Charge’ (ERC) potentially running into thousands of pounds as a penalty for ending your current mortgage product early. With a secured loan there are options to pay survey fees upfront or add them to the borrowing, and there are no conveyancing or solicitor costs, unlike a remortgage. Where speed is important, where time or deadlines are tight, or you need to raise money quickly, remortgaging can be a lengthy process, most commonly taking between one to two months providing that the application runs smoothly and doesn’t have any problems. Complications such as a rejected application may be more common with self-employed and low credit score applicants. Hence, the benefits of a secured loan with funding in a matter of a few days, perhaps a couple of weeks, make clear and logical sense when compared to a remortgage.
Here are some straightforward, yet unusual cases and examples, of recent second charge loans.
Maybe you are in a similar position? If so, do get in touch.
Interest-only loan – where it reverts to capital and repayment after 5 years.
Mrs. T. had gone self-employed and wanted to reduce her outgoings in the short term but repay the entire loan over the full term. This was arranged and at a very competitive price within her budget.
Large consolidation loan – The customer failed affordability for a first mortgage application.
In general, our lenders disregard all consolidated credit from their affordability calculations and will consider up to 100% debt consolidation. This is a common issue which can often be accommodated with a second charge loan allowing you to remortgage, usually penalty-free, within in a year or so, when mainstream lenders are able to assess a case and meet lending criteria.
A remortgagesolution – Often a remortgage would force a borrower to lose their interest-only product and could force them to take higher mortgage rates or even need to downsize immediately. A second charge could raise the cash needed and keep outgoings low. Therefore the borrower could stay in their home until they were ready to downsize in a few years time and pay off the interest-only mortgage at that point, remaining in control.
Borrowers still on work probation period – This can often push a remortgage option outside of lender criteria, as the lender requires an employment history track-record of stability for long-term lending. The options are therefore very limited. We have access to a number of lenders which consider work probationary periods, also special considerations for contractors and rolling contracts.
Newly self-employed business – Often there is the need to use dividend income from a previous business to demonstrate a loans’ affordability. Example: A client wanted to raise £100,000 deposit for a Buy-to-Let purchase, however, there was a complex mixture of employed and self-employed income, plus a recent change of business status. Although the proposition made perfect sense, a first charge lender would be unwilling and unable to consider the complexity, therefore a second charge loan was a perfect solution.
Maybe you are in one of these above positions? Situations can be really niched or mildly complex, yet there are solutions available.
Let us say “Yes, we can help” – Unusual cases
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THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME
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A couple needed to add a downstairs bedroom and bathroom to their home to improve their daughter’s standard of living. The couple approached their bank for a loan and were poorly advised (no surprises there) to pay for the refurbishment work on their credit cards. The Mortgage Adviser in their bank planned to help them to raise funds to clear the credit card debt through a further advance when the work was completed. Unfortunately, when they returned to the Mortgage Adviser in their bank, their debt to income was too high for them to capital raise to consolidate the debt.
The couple had accrued £100,000 worth of debt across multiple credit cards and were paying £2,999 per month minimum payment on their cards. Unsure how to consolidate the debt, they explored whether they could remortgage their house with another lender to clear the credit cards. Their case was reviewed, taking into account their new circumstances, however, they were reluctant to move their mortgage to another lender because they were tied into a competitively priced five-year fixed deal that wasn’t due to expire until June 2021. Remortgaging now would mean the couple would have to pay a very expensive early repayment penalty charge.
A Specialist Team was asked for help. A review of the case provided an illustration demonstrating that although there were some first charge mortgage lenders who would consider the case, the cheapest option was actually a second charge mortgage, to clear the debt. The illustration clearly highlighted the cost difference when they factored in the cost of the early repayment charges (if remortgaging) and total cost of the loan including interest rates and fees.
The customer was happy to proceed with a second charge mortgage product financed by a well-known name. The specialist team processed the case directly with the customer from this point, keeping everyone updated throughout the process. The case completed within just four weeks, enabling the couple to consolidate their debt into one simple monthly repayment of £657.97 per month, a massive saving on their previous monthly outgoings.
Let us say “Yes, we can help” – Clear credit debt assistance