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
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
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.
When did you last think of Second Charge mortgages for funding home improvements?
Second Charge mortgages can be the ideal alternative to a re-mortgage or unsecured loan if these don’t suit your circumstances, or where you would fail an application due to underwriting criteria.
This is why they can be really useful for when you want to carry out home improvements.
Here’s how we helped someone fund a home improvements project in just 7 days from the application being received to funds being released.
A client needed £35,000 for funding a home improvements scheme. This included replacing and insulating the roof, rebuilding the staircase and converting the loft into an en-suite bedroom – converting and transforming the property from a 2-bed into a 3-bed house.
The client had sufficient equity in their first charge mortgage, however, did not want to raise additional finance through a further advance or a remortgage due to high redemption penalties that would be incurred by changing the existing arrangement.
In just 7 days…
The client received their funds – a £35,000 Second Charge mortgage… and they were able to complete the project.
Let us say “Yes, we can help” – Funding home improvements
Office Telephone: 01379 644061
Office Mobile: SMS, Text, WhatsApp, BBM or Viber, 07951 238527
THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME
Here is a great product for you, or those who want to build a house in their garden.
The problem many borrowers have is lack of development experience, or the loan is deemed as `regulated’ so there is a lack of lenders.
This new product availability ticks lots of boxes as follows:
Available on regulated cases
You don’t need to be an experienced developer
Ground-Up developments including:
o Barn conversions
o Extensions increasing property by more than 50%
o Basement excavations
Up to 50% of the purchase price
Up to 25% of site value if already owned
Up to 100% of build costs
England Scotland and Wales
There are many other types of loan product available for non-standard or unusual reasons, including an Open-Ended loan, with no expiry date, and suitable for land or property regardless of condition – ideal for refurbishment of a property that is deemed Uninhabitable; no kitchen, no bathroom, rising damp, wet/dry rot, Etc.
Let us say “Yes, we can help” – Self-build development loan.
Office Telephone: 01379 644061
Office Mobile: Call, SMS, Text, Whatsapp or Viber 07951 238527
THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME
Recently, a non-standard request was made where a client had purchased a property just 3 weeks previously, and therefore had no mortgage history. The client wanted a loan for £150,000 to conduct some improvements to the property, which would include a new extension. However, he did not want to move into the property until the works had been completed.
On the face of this, the case wouldn’t be considered by most high street lenders, as the client wasn’t residing in the property, and had no mortgage history on this new home. However, the client was referred to a very specialist credit team in the hope that they would see the merits of the proposal, that being the client earned a very good income, was in stable employment and had put down a significant deposit to make the loan-to-value a reasonable figure. The lender approved the referral for a £156,000 second charge loan and left the client absolutely delighted with the offer made available.
Let us say “Yes, we can help” – No mortgage history.
A Third Charge loan is available up to 100% of a property value.
If you have a decent first and second charge rate and want to raise more cash but your circumstances mean that refinancing would be a disadvantage and leave you with an overall higher rate, a third charge could be just the answer. Whilst the third charge is marginally more expensive, the overall blended cost could be far lower.
A degree of Adverse Credit reference is allowed, for example:
• 5 months current loan arrears – max 2 months in last 12 and must have paid the last 3
• Maximum of 2 payday loans in last 12 months
• No missed unsecured in last 6 months but can have a maximum of 3 months down in the last 12 months
100% Loans of up to £35,000 are available.
This could suit you where a remortgage might hike up the overall rate or you just don’t have the equity to remortgage. It is also for those who would fail credit score for an unsecured loan but they don’t want to pay the higher rates of guarantor/payday loans, or where your mortgage lender won’t consent to a second charge.
The 100% plan with higher levels of adverse is available on both a second or third charge.
These products are niche and not the lowest rates you will see, but as part of an overall solution or strategy, they could often be more cost-effective.
Let us say “Yes, we can help” – Third Charge Loans
Historically second charge mortgages, more commonly referred to as loans, were seen as a last chance option for a client’s borrowing needs. The rates were much higher and carried hefty early repayment charges. However, fast-forward to today, loans are regulated exactly the same as mortgages, and in many circumstances can be more appropriate than a remortgage. So… do you really know about loans and second charge mortgages?
There are many scenarios when a loan could benefit you when looking at capital raising and can offer a welcomed haven against some of the restrictions on the first charge (mortgage) market.
Characteristically, we see loans for customers who are looking to:
• Retain their current low-rate mortgage / interest-only mortgage
• Raise capital on BTL properties
• Circumvent the early repayment charges that a remortgage may be subject to
• Capital raise where any adverse credit means you are unable to remortgage on the high street
• Raise funds on a term-loan that would take you beyond normal retirement age
• Avoid paying upfront fees or costs for valuation
• Receive the funds sooner than a standard remortgage could offer
We are specialists in Residential, Buy to let and Commercial properties, and offer advice and recommendation on the marketplace as a whole, we are not tied to one lending source, application route, nor institution. For loans, we have access to a diverse panel of lenders who are able to provide solutions for all circumstances.
Let us say “Yes, we can help” – So you think you know about loans?