Simply put, second charges are additional mortgages to the primary mortgage on a property (with a different lender) to raise additional money. Why might you consider a second charge?
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If you have a good rate on your primary mortgage (first charge) and borrowing more money is not possible with that lender, you have the option of raising these funds via the use of a second charge which saves paying an exit fee to remortgage (and lose the rate!)
Most second charge lenders will allow the loan to be taken for a variety of reasons, not purely property improvement. Whether this is the purchase of a vehicle, payment of a tax bill or a wedding - it gives you another potential avenue.
As opposed to traditional timelines when remortgaging, second charge funds can often be released within days of an application being submitted.
This type of finance will not be the best route for everybody. You will have two mortgage payments and the interest rate payable on the second charge will normally be higher than residential mortgage. The LTV will normally be capped at 85%.
If you are stuck and unable to borrow more from your current lender then this may be a solution for you. To discuss how a second charge may be able to help click here.
LEGAL INFORMATION
Latitude Finance Ltd is an Appointed Representative of BrokerSync Ltd, which is authorised and regulated by the Financial Conduct Authority (1031981).
There may be a fee for Mortgage Advice. The precise amount will depend upon your circumstances and will be agreed upon following your initial meeting.
Equity Release, Investments, Pensions, Wills, Trusts, PMI and Estate Planning will be referred to our authorised third-party providers. Latitude Finance Ltd and BrokerSync Ltd are not responsible for any advice received from the third-party providers.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Conveyancing, Wills, and some forms of Buy-to-let Mortgages and Commercial Mortgages are not regulated by the Financial Conduct Authority.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured against it.
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is, therefore, primarily targeted at consumers based in the UK.
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