Oooh eerrr. That’s a big one
Steve Walker
Promise Money. Specialist mortgages, secured loans, commercial mortgages, bridging and development finance to Brokers, Introducers & Property Investors. Founder of Charity Promise Dreams. Helping terminally ill children
What a carry on eh?
It seems more brokers are now using second charges for large loan amounts. Are you?￡200,000 to over ￡400,000 is getting more common - here are some typical reasons why:
? Large amounts of debt consolidation – easier and generally accepted on seconds – and we can give the advice so easier for the broker.
? Large loans for people with poor credit - ideal if you want to repair credit before remortgaging.
? Property type / construction / condition not catered for by competitive mortgage lenders.
? Clients are tied in to a fixed rate mortgage – instead take a variable rate or a 2 year / 5 year fixed second charge with no ERC’s - perfect if you want to remortgage in the near future.
? Loan purpose restricts the choice of remortgage lender and increases remortgage rate – eg business purposes, tax etc - It’s often better to borrow the extra amount on a second and keep the low mortgage rate
With loan rates from 3.5% (sometimes lower) whenever the application dictates that the remortgage rate is higher than the current mortgage rate, a second charge should leap out as a possible option.
A secured loan can be an excellent interim solution to meet the borrowers' needs now, earns the broker commission and reduces the risk of the client applying online and falling in to the hands of a competitor.
Always worth considering
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