The second charge market is changing. Products are becoming much more aligned with the types of product that clients are used to in the first charge market and rates are now available for a little as 3.65%.
This is opening up the market to a much wider range of clients and we are seeing growing demand from clients who can benefit from a second charge loan to pay for home improvements and debt consolidation.
For clients making improvements to their property, a second charge loan can provide a cost-effective solution in the short to medium term, enabling them to complete the work and increase the value of the property ahead of remortgaging at a later date at the new higher value.
Similarly, clients with historic debts that impact the amount they can borrow on a first charge mortgage can benefit from taking a second charge loan to consolidate and pay down the debts at a lower interest rate ahead of remortgaging in the future.
With a growing number of borrowers opting longer term fixed rate mortgages, a second charge loan can also be a way of raising extra money on the property without triggering any Early Repayment Charges (ERCs).
When we work with clients on a second charge loan, we always consider their future plans as well as their immediate requirements so that we can align the first and second charge, providing an opportunity to refinance onto a longer-term solution in the future.
This approach provides brokers with more flexibility to meet a client’s goals in the short to medium term and the opportunity to refinance them onto a more cost-effective solution. So, it’s a great way of maintaining regular contact with your clients as well as delivering them solutions they may not have even considered.
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