Did you know you could have a second charge instead of remortgaging?

In an interesting survey recently published declared that 79% of respondents were unaware of second charge mortgages. Understandably this has resonated throughout the mortgage industry and its broker network. Second charge mortgages mortgage allows you to use any equity you have in your home as security against another loan. That’s remortgaging isn’t it?!

Hayes Finance here will outline second charge mortgages and some possible scenarios:

  • If your credit rating has gone down since taking out your first mortgage, remortgaging could mean you end up paying more interest on your entire mortgage, rather than just on the extra amount you want to borrow.
  • If your mortgage has a high early repayment charge, it may be cheaper for you to take out a second charge mortgage rather than to remortgage. Remember, if you remortgage you may have to pay a penalty.
  • There may be a higher % interest rate on the second charge, however, this could still be less than the penalty if your remortgages. Ideal if you are renovating or extending the mortgaged property.
  • If you’re self-employed and are trying to get an unsecured loan, a second charge mortgage could be an answer.

New business volumes in the second charge mortgage market shrank by 15 per cent in October to £71m, per new figures from the FLA. There’s a couple of reasons for this:

  • Many brokers are NOT educated on the benefits of Second Charges. This is not the case with Hayes Finance; we are perfectly placed to assist you, and would be delighted to do so.
  • Earlier in 2016, second charge mortgages came under increased scrutiny from the Financial Conduct Authority (FCA) to ensure adherence to best practice from brokers. This has led to uncertainty amongst the brokerage network. There’s no uncertainty at Hayes, let’s talk!

By speaking to Hayes Finance, we are increasingly being asked for second charge mortgages. We’d be delighted to help you. What will we do for you?

  • Approach your existing lender and ask them what they would charge for an additional loan.
  • Outline the exact mortgage terms, fees, interest rates and detail to help you make an informed choice.

Call 020 3126 4898 or email: kieran@hayesfinance.co.uk

Sources: https://www.moneyadviceservice.org.uk/en/articles/second-charge-or-second-mortgages