This is a good option for customers are want to capital raise by releasing some equity from their current residential property.
As long as there is at least 15% equity in the property you can apply for a second charge mortgage. Some mortgage lenders can offer a more flexible lending measure than a first charge mortgage, however, applications are assessed in the same way as a normal mortgage. Taking the property’s value and condition into consideration as well as your credit rating and income.
Second Charge
First Charge
How much you could borrow will all depend on the equity in your existing property – this is the percentage of the property owned outright by you. An example, if you bought a house for £700,000 and you have £250,000 left to pay, then the equity you have left is £450,000.
You can usually borrow the money starting £10,000. The more equity you have in your property, the more money you will to be able to borrow. Although this would be depending on your current income as well as your credit rating.
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Are SECOND CHARGE Loans a Good Idea?
Just as a first charge mortgage, your home is at risk from repossession if you don’t keep up the repayments
If you sell your property, the debt on the first charge mortgage gets paid in full before any money goes towards clearing off the second charge, the second charge lender could be able to pursue you for any shortfall
ARE SECOND CHARGE LOANS ALWAYS BEST
Why choose a second charge mortgage?
Second charge mortgage can be used for different purposes. If your need to raise extra cash for a specific reason, without affecting your existing mortgage arrangements, it can be a good choice to avoid early redemption charges or retain low interest rates. When remortgaging it can at times incur significant costs if early redemption charges.
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