“We understand and relate to the individual needs of all different kinds of clients, whether you require a Secured Loan or Second charge Mortgage for home improvements, a new car or paying the educational fees of your children, we can help you secure the most suitable product for your needs”
What is a Second Charge Mortgage or Secured Loan ?
Second Charge Mortgages or Secured Loans are secured loans that use the borrowers home as security for the loan. Secured loans and Second charge Mortgages are always secured on a second charge basis, meaning they fall second in line to receive any money if the borrower was ever to default on their original mortgage, and their house was to be repossessed and sold to pay off the debts secured against the property. The main and original mortgage would always be secured on a first charge basis, and therefore has the right to get paid first before all other borrowing in the event of default.
How much could I borrow upto ?
The advantage of a secured loan or second mortgage is, that the amounts available to borrow are linked to the equity available in your home. Amounts of upto £100,000 are available by some Banks and Building Societies, where as £25,000 is really the maximum available on a personal loan.
What kind of rate could I receive ?
Secured Loans and Second Charge Mortgages present a significant risk to the lender, as chances of recovering a debt from the borrower if they were to default are greatly reduced in the event of default, as the first charge lender will be repaid first after any sale from repossession. For this reason, the average rate on Secured Loans and Second Charge Mortgages is usually higher than standard mortgages on a first charge basis. But the rates are still usually lower than those applying to personal loans.
Could I borrow for a longer term on Second Charge Mortgages or Secured Loan than on an unsecured loan basis ?
An unsecured loan offers the ability to pay back a loan over a maximum of usually 10 years, very few unsecured lenders offer terms beyond this period of time. Secured Loans and Second Charge Mortgage lenders however readily allow you to make repayments over a much longer period, such as 15, 20 and even 25 years. The benefit of securing these types loans over a longer period, is that your monthly repayments will be much lower than if they were to be secured on the shorter terms of unsecured loans. The downside however, is that you end up paying much more interest over the longer term, so it’s important to weigh up the costs and benefits very carefully.
Your credit score on Secured Loans and Second Charge Mortgages
Your credit score will be taken into account by lenders when deciding what interest rate to charge on your Secured Loan. But in contrast to Unsecured loans, Secured loan lenders tend to have a sympathetic approach to setting the interest rate, as they know they can always rely on the fact that the loan is secured against your home, in other words, the lenders are confident that they will always get their money back.
You could lose your home
If you decide to raise money by offering your home as security for a loan, then the risk of losing your home through repossession if you were to default will always be present. The lender will seek to recover their funds by repossessing your home and using the proceeds to clear the debt after sale. It is also worth bearing in mind that Secured Loans and Second Charge Mortgages are charged on a variable rate basis, so to avoid any difficulties meeting the repayments, you should check you will be able to make the repayments if the interest rate were to rise in the future. Secured loans almost always carry an early repayment charge for settling a debt early, and therefore are viewed as being being not as flexible as other lending products.
Alternatives to Secured Loans and Second Charge Mortgages
An alternative to Secured Loans and Second Charge Mortgages would be to increase your current mortgage by way of a further advance. In order to take a further advance you need to have enough equity available in your home, and then you will pay a different interest rate on the further advance portion of your mortgage from your main mortgage. There may be fees involved to set up the further advance, but you still may be better off and save money on your repayments.
Another alternative would be to remortgage and take a larger amount than your currently outstanding mortgage to incorporate the extra borrowing you desire. The trick is to find the most favourable rates and terms in order to place yourself in a much better position to save money on your monthly repayments. The downside however, is that you would have to satisfy the new lenders lending criteria for the remortgage, which nowadays is becoming increasingly difficult to satisfy. A further advance would be an easier and much less stringent option to secure a loan.
How I can Help
At Mortgage Broker East London we are Independent and completely whole of market, we can source and arrange a huge selection of standardised and specialist Secured Loan and Second Charge Mortgage products. We understand and relate to the individual needs of all different kinds of clients, whether you require a loan for home improvements, a new car or paying the educational fees of your children, we can help you secure the most suitable product for your needs.
I can provide you with concise and comprehensive advice and assistance regarding all aspects of your Secured Loans or Second Charge Mortgage needs from initial advice to application stage and all the way to completion. Having a mortgage professional on hand to assist you every step of the process can save you time, effort and money, easing the stress of your mortgage process.
Please contact me today for an informal and friendly chat to discuss your needs. All initial advice is completely free and confidential. You can contact me using the “contact us” form at the top right of this Page and i’ll get back to you as soon as possible, or alternatively you can contact me via my details below, or CLICK HERE
Thank you for visiting.
Balraj Singh (Bal)
Tel: 0330 010 1433 (Mobile Friendly)
Mob: 07985 417 490