Understanding Equity

Equity is the portion of your property that you own outright.

Here’s how you work it out…Equity=Property Value−Outstanding Mortgage Balance

So for example, if your home is worth £300,000 and you have £200,000 left to pay on your primary mortgage, your equity is + £100,000.

The amount you can borrow depends on your equity, income, creditworthiness, and the lender’s criteria.

                                                                                Why Choose a Second Charge Mortgage?

You need funds for large expenses like home improvements, debt consolidation, or education.  Your current mortgage has a favorable interest rate, and remortgaging would result in penalties or higher rates. You want to avoid disturbing the terms of your existing mortgage.  

                                                                                                   Some Key Features. 

It is independent of your primary mortgage. You will make separate monthly payments for the first and second mortgages. The loan is secured against your property, so failure to repay could result in repossession of your home. Rates are generally higher than first-charge mortgages but lower than unsecured loans, as the lender has security in your property.

                                                                                               Considerations and Risks

You’ll have two loans secured against your home, which increases your financial obligations. Defaulting on payments could lead to losing your property. Second charge mortgages often involve arrangement fees, valuation fees, and legal costs.

Second charge mortgages are suitable for specific circumstances, but you should always carefully assess the costs, risks, and benefits.

If you think a second charge may be suitable for your needs, please get in touch. We can discuss all your needs and ascertain whether it is indeed the right                                                                                                                option to take.