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SECOND CHARGE MORTGAGE SAVES CLIENT £1275 PER MONTH...

And the broker gets two bites of the cherry.

Objective

Mr & Mrs X were in a fixed rate period that was due to end a couple of months’ following the date of the enquiry.
They had accrued just over £50k in unsecured credit since taking out their mortgage and were paying £1600 per month to service the debt. They also wanted to raise an additional £6k for home improvements.

Obstacle

Having approached their mortgage adviser to remortgage, with a view to consolidating their unsecured debt and raising the additional funds, they were declined due to failed credit score and / or affordability with several first charge lenders. These lenders had already been filtered down as those who would consider capital raising at the LTV required for debt consolidation.

In addition, the pandemic hit, and one of the clients were furloughed which meant that even the second charge mortgage route was no longer an option. However, as lenders came back into the market, Brightstar’s second charge mortgage specialist was able to deliver the good news that we could now proceed with the application.

Outcome

The mortgage adviser recommended a product transfer onto a flexible fixed rate, which featured no ERC’s and the peace of mind of having fixed monthly payments.

Brightstar were able to complete a second charge mortgage, raising enough capital to clear all unsecured credit commitments, plus the £6k required for home improvements.

The lender chosen was United Trust Bank and the clients opted for a 5-year fixed rate with no ERC’s at a rate of 5.1%. The term of the second charge mortgage was matched to the term of their main mortgage to keep payments low as the plan is to revisit a remortgage in the future, taking out the second charge.
Mr & Mrs X reduced their monthly payment to £325, saving them £1275 per month and the broker was paid for the product transfer, as well as the second charge mortgage.

 

TO FIND OUT MORE, OR TO DISCUSS AN ENQUIRY, CALL 01277 500 900

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