Additional Borrowing
Second Charge Loan
A second charge loan is a practical way to borrow extra money without changing your current mortgage. It’s secured against the value of your home, making it an achievable option for homeowners who need funds for things like home improvements, debt consolidation, or other big expenses. This way, you can keep your existing mortgage as it is while accessing the additional money you need.
Loan Purposes
Home Improvements
This is one of the most common reasons, as it can increase the value of the property, which benefits both the borrower and the lender.
Debt Consolidation
Combining debts into one loan may help to reduce a borrower’s financial burden monthly. This is usually an attractive option for customers who want to make one payment towards all their debts and keep payments low.
Investment Opportunities
When used for investments like property or business, lenders may view this as a strategic decision that could potentially increase the borrower’s financial stability.
Large Expenses
Funding significant life events or purchases is another common and acceptable use, as it allows borrowers to manage such costs without disrupting their primary mortgage.
Other Uses of a Second Charge Loan
A Second charge loan can be used for a wide range of purposes, including home improvements, debt consolidation, large expenses like weddings or holidays, and investment opportunities such as purchasing property or starting a business. It can also cover emergency expenses, medical treatments, or educational fees. Other acceptable uses include funding a Car purchase, paying off tax, or covering divorce-related costs. While lenders typically prefer uses that improve the borrower’s financial position or property value, second charge loans can provide flexible financing for various needs, allowing homeowners to access funds without altering their primary mortgage.
Further Advance
A Further Advance is a way to borrow extra money from your current mortgage lender by adding to your existing mortgage. It’s a simple option for homeowners who need additional funds, like for home improvements or consolidating debts, without needing to switch lenders or take out a separate loan. You’ll keep your current mortgage deal and manage everything in one place, making it a convenient and cost-effective option.
Second Charge Loan
- Lower Monthly Payments: Second charge mortgages let you spread repayments over a longer period, resulting in lower monthly payments compared to unsecured loans.
- Early Repayment Charges: A second charge loan can allow you to avoid early repayment charges and keep your current fixed rate, which might be better than the rates available today.
- Flexibility: Many second charge mortgages do not have early repayment charges, meaning if the client is in a position to pay the money back quicker than the planned term, they will often have the flexibility to do this.
- Loan to Value: Sometimes on a second charge mortgage the client may be able to borrow more due to a higher loan to value threshold or increased affordability.
- Flexible Usage: Borrowing can be arranged for a wide variety of reasons in the same way as a regular remortgage such as home improvements, debt consolidation or many other purposes.
- Some Exceptions and Allowances: Some lenders will even consider lending for clearing tax bills (Subject to the circumstances around it which will need to be explored).
Further Advance
- Lower Interest Rates: Further Advances typically come with lower interest rates compared to other additional borrowings, as they are part of your existing mortgage deal.
- No Additional Secured Loan: Unlike a second charge loan, a Further Advance doesn’t create a new loan secured against your property—it simply extends your existing mortgage.
- Simplified Management: You’ll only have one mortgage to manage and repay, unlike other additional borrowing options where you would have two separate loans.
- No Need for a New Lender: With a Further Advance, you stay with your current mortgage provider, avoiding the hassle of dealing with new lenders or transferring property details.
- Potentially Longer Terms: Further Advances often allow you to spread repayments over the same term as your existing mortgage, potentially reducing monthly costs.
- Various Uses: The additional funds can be used for various purposes, such as home improvements, consolidating debt, or covering large expenses.
Access Funds with Confidence Today!
Unlock the potential of your home with expert guidance every step of the way. Whether you’re considering a Second Charge Loan or a Further Advance, we’re here to help you make the right choice and secure the funds you need without disrupting your current mortgage.