Sometimes, doing a debt consolidation remortgage might not be your best option. Here are some reasons why; You have an excellent interest rate on your current deal and you do not wish to leave this, or. Your present Mortgage is on a fixed rate and remortgaging early could mean high early repayment charges or You have bad credit and might not qualify for a remortgage. The other main reason for a second charge mortgage is that people who have a less than-perfect, or bad credit score can still be in with a chance of being approved. Also, it might be easier to get a second-charge mortgage if you have a fluctuating income or are classed as self-employed.
In these circumstances, you can get something known as a second-charge mortgage. Your present mortgage will stay in place and another Lender will provide you with a second mortgage secured against your property. In other words, you’ll have two mortgages by two separate lenders on one property, with 2 monthly payments going out to 2 different lenders.
A second charge mortgage is a secured loan, which you take out against your property. You use any spare equity on your existing property to raise money. Affordability checks on a second-charge mortgage or secured loan are not as strict as a first-charge mortgage because your existing home is used as security, whereas with a second mortgage, you’re simply taking out a brand new mortgage.
It’s called a second charge loan because it comes second in priority to paying off your first mortgage. For example, if you fail to keep up repayments or get into financial difficulties your house may be sold. The proceeds will go towards paying off your first mortgage, and the second charge mortgage after that is paid off.
A first, or standard mortgage, is a loan based on your credit rating, the size of your deposit, your income, and your general ability to repay the debt each month. Whereas a second mortgage is a loan based on the available equity in that same property
Equity is the value of your current home money, less the outstanding mortgage on it. For example, if your home is worth £300,000, and there is £100,000 left to repay on your current mortgage, you have £200,000 worth of equity.
We do not offer second charge services personally but we can refer you to our third party who will be happy to help you.
Robi Finance Ltd
4 Pelham Court, Cambridge CB4 3TD, Tel no: 01223 560 472 – 07956827018, Email: [email protected]
The company is registered under Reg No:14639627 in England and Wales.
Robi Finance Ltd is registered with the Information Commissioner’s Office under registration reference: ZB477056 Copyright © 2021. All Rights Reserved.
Robi Finance Ltd is an Appointed Representative of Connect IFA Limited 441505 which is Authorised and Regulated by the Financial Conduct Authority and is entered on the financial services register (https://register.fca.org.uk/s/) under reference 995310.
The FCA does not regulate some forms of Business Buy to Let Mortgages and Commercial Mortgages to Limited Companies.
Not all services we offer are covered by the Financial Conduct Authority.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
The information, advice and/or guidance contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
A fee will be payable for arranging your mortgage with Robi Finance Ltd. The amount of the fee will depend upon your circumstances. Your consultant will confirm the amount before you choose to proceed but we estimate it to be around 0.65% (min £499). The initial consultation is free.
Commission Disclosure: We are a credit broker and not a lender. We have access to an extensive range of lenders. Once we have assessed your needs, we will recommend a lender(s) that provides suitable products to meet your personal circumstances and requirements, though you are not obliged to take our advice or recommendation. Whichever lender we introduce you to, we will typically receive a commission from them after the completion of the transaction. The amount of commission we receive will normally be a fixed percentage of the amount you borrow from the lender. Commission paid to us may vary in amount depending on the lender and product. The lenders we work with pay commissions at different rates. However, the amount of commission that we receive from a lender does not have an effect on the amount that you pay to that lender under your credit agreement.
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