Flexible Second Charge Mortgages

Your alternative to remortgaging

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A GUIDE TO SECOND CHARGE MORTGAGES & LOANS

We work to secure you a second charge mortgage tailored to your circumstances

When someone needs to raise tens of thousands of pounds, homeowners have a multiple avenues they can go down.  By using the equity in their home as collateral, they can get a secured loan in the form of a second charge mortgage or they can opt for a remortgage.  Here at Tailored Money, we are often asked what the better route to go down is, but unfortunately, there isn’t one blanket answer. We assess every case on an individual bases and work with our customers to find the best financial product to suit their needs.  Let’s focus here on second charge mortgages and look at exactly what they are, when they are useful and what it could mean for you.

A second charge mortgage, also known as second charge loan is a type of finance that is secured against your property on top of your existing mortgage.  When you take out a second charge mortgage, you essentially have two mortgages on your home; however the original mortgage known as the first charge will always take precedence over the second.

More often than not, a second charge mortgage is used as an alternative to remortgaging or getting a personal loan.  The reasons may be because your credit rating has decreased since taking out your original mortgage so the interest rate offered for a remortgage would increase across the whole mortgage, therefore making it more expensive overall.  Or perhaps your existing mortgage has a high early repayment fee so after doing the sums it actually works out cheaper to take on a second mortgage instead.  Or more simply, maybe you’re just finding it difficult to get approved for an unsecured personal loan.

So, how does a second charge mortgage or loan actually work?  Simply put, you are given a loan which is secured against the equity of your home. It works in the same way as your primary mortgage does in that you make regular repayments to pay off the loan as well as any interest you have accrued during the repayment period.  Similarly, if you sell your home, as well as repaying your mortgage you will also have to pay off any debt that is secured against the property.

When is a second charge mortgage not a suitable solution? Well that depends on your individual circumstances and at Tailored Money, we take the time to understand the financial position you’re in and advise you on which products are best suited to you.  It is important to note that a second charge mortgage or second charge loan is a form of secured lending so if you are not able to keep up your repayments then your home could be repossessed to settle the debt.  This is obviously something that we all want to avoid so it’s imperative that you have a strong financial plan and a clear idea of how it’s going to be repaid over the loan term.

Our simple, hassle-free approach gives you a quick answer on your eligibility for a second charge mortgage or loan.  We clearly set out the terms of the financial product offered and all we ask is that you take the time to fully understand the terms offered and what this could mean for your situation.  Your assigned broker will always be on hand to help and offer assistance so if there is anything you aren’t quite sure of or you feel needs further explanation, please just ask.

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