How to identify a second charge loan opportunity?

Key to understanding when a second charge loan is probably the best outcome is to know when a remortgage is not likely to work. So, if a remortgage or further advance is not on the menu for whatever reason, then potentially a second charge opportunity has arisen.

Usually when residential clients…

  • Want to retain their current low-rate mortgage
  • Want to retain their current interest-only mortgage arrangement
  • Are self-employed; where only an accountant’s reference is available for proof of income
  • Have a number of unusual income sources
  • Want to avoid large redemption penalties
  • Need funds quickly and don’t want to remortgage away from their favourable deal
  • Want to raise capital against their UK property to purchase foreign property
  • Don’t want any upfront costs such as valuation or legal fees
  • Need to borrow more than the restrictive limit of £25,000 for an unsecured loan.
  • Have a personal banker who doesn’t want to/can not help
  • Don’t want to use their bank or mortgage company to raise funds
  • Have been declined for a further advance with current lender
  • Want to use the money to pay a personal tax bill
  • Have been declined for an unsecured loan online or through their bank

And for property investors to:

  • Raise money on their residential or BTL property to buy an unmortgageable property for development
  • Leave their BTL mortgage arrangement in place, but still raise money using a second charge facility
  • Get quick access to funds, as secured loans are generally much quicker to arrange

And also for business purposes:

  • To inject cash into a business
  • Capital to pay business tax liabilities or to clear a business overdraft
  • Money required to purchase stock or machinery
  • Raising money on a residential property to purchase a business property

If you were to ‘cut out and keep’ any part of this reference guide then the pointers above would certainly be a useful section to keep in your pocket.

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