What are second charge mortgages?
Well they sound like they should be complicated but they are basically what they say they are. Your main mortgage is the “first charge” on your property, this means that should you not pay your mortgage and repossession takes place they get first dibs on the funds from the sale. Therefore the second charge lender gets second dibs on the funds. As they are second in the queue they are taking more risk and so you will be charged a bit more.
Why would you need to consider a second charge?
You have a further borrowing need and this cannot be met by a first charge solution. This could be because your existing lender will not lend you the funds you require but you have significant early repayment charges that prohibit you moving your mortgage to another lender. In this circumstance a second charge may be cheaper than paying the early repayment charge.
What can I borrow for?
Although your personal reasons may vary common reasons are home improvements, debt consolidation, tax bill, wedding or a car.
You do need to be aware your home is required as security, the lender will take a legal charge over your property just like your main mortgage provider. The charge is removed once the second charge has been repaid. You will still own your property.
For a no obligation chat about second charge mortgages you can call The Surrey Mortgage Broker on 01252 759233.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.