The Bishop's Stortford Flyer Magazine Bishops_Stortford_Flyer_Jul2018_For_Web | Page 18

The Flyer
The Salvation Army News
Could a Second Charge be
the best option for you?
Mark Horsfall
Second Charges are
not usually the fi rst
option homeowners
consider when they
want to release
equity from their
property and
they are normally
completely
disregarded. But
should they be?
So, what is a Second Charge?
A Second Charge is a loan that is
secured against your property that sits
behind your current mortgage.
Second Charges are often referred to
as a second mortgage as they have
secondary priority behind your main
mortgage. They are a secured loan,
which means the lenders use your
home as security.
Many of our clients are choosing a
Second Charge over a re-mortgage
especially if they are looking to do
some home improvements, consolidate
any unsecured borrowing (loans,
credit cards etc.) or even for business
purposes!
There are several reasons why you
would choose a second charge over a
re-mortgage. It could be that…
• Your current mortgage has a high
early repayment charge and re-
mortgaging would work out more
costly
• To borrow more on your mortgage
could push you in to a higher
interest rate band so it is cheaper to
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pay a higher interest rate on just the
extra amount and not your whole
mortgage
• Your struggling to get some form of
unsecured borrowing
There are many positive things about
Second Charges. For example:
• They are very fl exible. Not only can
you choose to have these on a fi xed
or variable interest rate product,
but you can also have these on a
repayment basis or interest only.
• Some Second Charges also have
no early repayment charges, which
means you will not be charged to
redeem this early.
• They usually have higher income
multiples. This means if you are
struggling to borrow enough money
on your mortgage, you could get
the amount you need with a Second
Charge
A second charge is not only for
residential properties and you can look
to take out a second charge on any
buy to let properties you may own,
including HMO’s.
Some