The mortgage market is seeing a notable trend: second charge mortgage loan applications are on the rise. Recent data released today by the Finance & Leasing Association highlights that the value of second charge lending in May was 22% higher than the same month last year, reaching an impressive £142 million. In this blog we will explore what a second charge mortgage loan is, why someone would want to have a second charge loan, and how to get a second charge mortgage loan with the help of an advisor like ourselves at Oportfolio Mortgages.
Second Charge Mortgage Loan Applications And Values Are Increasing
This previously mentioned figure marks the highest month for new business by value since October 2022. Additionally, the total number of new second charge loans increased by 16% from May 2023, with 2,957 new agreements. Over the past 12 months to May, there were 32,183 second charge deals completed, worth £1,490 million. However, when compared to the previous 12 months, lending was down by 1% in both the number of agreements and the value of loans. So why is this relatively unknown mortgage type becoming so popular? And what is a second charge mortgage?
What Is A Second Charge Mortgage Loan?
A second charge mortgage, also known as a second mortgage, is a loan secured against your home that sits behind your primary mortgage. It allows homeowners to leverage the equity in their property to borrow additional funds without refinancing their first mortgage. Essentially, it is a way to access extra capital without disturbing the terms of your existing mortgage agreement. It is important to understand that it is SEPARATE from your existing mortgage loan.
Key Features Of Second Charge Mortgages
- Additional Borrowing: Provides an opportunity to borrow additional money against the value of your home.
- Separate from First Mortgage: Keeps your primary mortgage intact and unaffected.
- Flexible Use: Can be used for various purposes such as home improvements, debt consolidation, or funding large expenses.
Why Use A Second Charge Mortgage?
Homeowners may choose a second charge mortgage for several reasons:
- Avoiding Re-Mortgaging: If you have a favourable interest rate on your current mortgage, taking out a second charge mortgage allows you to borrow additional funds without losing that rate.
- Raising Large Sums: Second charge mortgages can be a practical way to access significant funds based on the equity built up in your home.
- Flexible Repayment Options: These loans often come with flexible repayment terms that can be tailored to fit your financial situation.
- Debt Consolidation: Consolidating higher interest debts into a second charge mortgage can simplify your finances and potentially lower your overall interest costs.
How to Get A Second Charge Mortgage with Oportfolio Mortgages
At Oportfolio Mortgages, we specialize in helping clients navigate the complexities of second charge mortgage loans. Here’s how we can assist you:
Initial Consultation
Our process begins with a free initial consultation to understand your financial situation and goals. We’ll discuss your existing mortgage, your equity, and how much additional borrowing you require. This can be done face-to-face in our London based office, over the phone, or via zoom.
Expert Advice
Based on your circumstances, our qualified mortgage advisors will provide tailored advice on whether a second charge mortgage is the best option for you. We’ll explain the terms, potential costs, and benefits, ensuring you have a clear understanding before proceeding. Our advisors have over 20 years’ worth of experience, and pour business has been running for over 15 years.
Application Process
If you decide to move forward, we’ll handle the application process from start to finish. This includes gathering necessary documentation, liaising with lenders, and ensuring all regulatory requirements are met.
Approval And Funding
Once your application is approved, we’ll guide you through the final steps to secure the funds. Our team will ensure a smooth and efficient process, allowing you to access your funds as quickly as possible.
Ongoing Support
Even after your second charge mortgage is in place, Oportfolio Mortgages provides ongoing support and advice. We’re here to help you manage your mortgage effectively and address any future needs or changes in your financial situation.
Speak To A Second Charge Mortgage Loan Advisor Today
The recent increase in second charge mortgage loan applications and values underscores the growing interest and utility of this financial product. Whether you’re looking to leverage your home equity for a significant project, consolidate debt, or avoid refinancing your primary mortgage, a second charge mortgage could be a viable solution. At Oportfolio Mortgages, we are committed to providing expert advice and personalised service to help you make the best financial decisions. Contact us today to learn more about how we can assist you with your second charge mortgage needs.
