Second charge mortgages or second loans are often referred
to as “second mortgages” because they have secondary priority behind your main
(or first charge) mortgage. They are a secured loan, which means they use the borrower’s
home as security. Many people use them as a way to raise money instead of
remortgaging, but there are some things you need to be aware of before you
apply.
• You must be a homeowner to get a second mortgage, although
you do not necessarily need to live in the property.
• A second charge mortgage allows you to use any equity you
have in your home as security against another loan. It means you will
essentially have two mortgages on your home.
• A second charge mortgage can be a loan of anything from
£1,000 upwards.
• Lenders now have to comply with stricter UK and EU rules
governing mortgage advice, affordable lending and dealing with payment
difficulties. This means that lenders now have to make the same affordability
checks and ‘stress test’ the borrower’s financial circumstances as an applicant
for a main or first charge residential mortgage.
• Borrowers will now have to provide evidence that they can
afford to pay back this loan.
Our expert Advisers will be able to help you regarding what
an affordability assessment might involve, and the evidence you may be required
to provide to support your second mortgage application. Call us on 0117 325
1511
For further information, please visit
www.bristolmortgagesonline.com/second-charge-mortgages
No comments:
Post a Comment