Second charge mortgages – an evolving market

Thursday, January 31st, 2019

It has become apparent in recent months that the second charge mortgage market is evolving in many different directions, particularly regarding lending on a buy-to-let property. 

In our experience, an increasing number of existing landlords are using a second charge on their buy-to-let property in order to raise capital. 

Raising capital on a buy to let property

The most common reasons we have come across are to release equity to increase the size of their existing property portfolio, make improvements to one or more of their buy-to-let properties or to fund improvements on their main residence. 

Why choose a second charge mortgage?

One of the main factors in landlords choosing to use a second charge mortgage on a rental property is that the existing rental income can often cover both the monthly payments for the existing buy to let mortgage and that required for any additional borrowing. 

Another reason for choosing to raise the capital via a second charge mortgage is where a landlord may not want to sacrifice an attractive interest rate deal, they have on an existing mortgage in favour of a new deal on the whole amount of the mortgage plus the new borrowing at a potentially inferior interest rate.

Get the right mortgage advice

However, when raising the capital, it is always important to get expert mortgage advice regarding the most appropriate route. Our experienced professional advisers will be able to guide and recommend the best and most suitable route in each situation to ensure the funds are raised in the most cost-effective way and in a manner that meets clients’ plans.

Our team here at Caboodle Finance of Sutton Coldfield, Birmingham will always do their utmost to ensure that clients get access to the very best mortgages and second charge mortgages that match their individual circumstances. 

For more information call 0121 308 9114 today or alternatively just click HERE to contact us by email and one of our specialist mortgage broking experts will be in touch. 

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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. CONSOLIDATING DEBTS MAY INCREASE THE TERM AND TOTAL AMOUNT PAYABLE.

Your initial consultation is free and you are under no obligation to proceed with a mortgage we recommend. There will be a fee for mortgage advice. The exact fee will depend on your circumstances and may be reduced depending on the loan amount and any commission we receive from the lender. It is estimated that the fee will be £595, but it may range from £495 to 1% of the amount you borrow. The fee is only payable on completion and can normally be added to the mortgage. This will be discussed and agreed with you before you make an application. Please ask for a personalised illustration.

Secured loan rates from 3.95% APRC, although we have plans available up to 29.9% APRC which allow us to assist customers with the most severe credit problems. The overall cost for comparison is 7.65% APRC. For secured loans a broker fee up to 10% of the loan amount borrowed may be payable on successful completion. A lender fee may also apply. The actual APRC available will depend on your circumstances. All loans are subject to status. Please ask for a personalised illustration.

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Caboodle Financial Services Ltd, registered in England at SQ2 House, 240b Lichfield Road, Four Oaks, Sutton Coldfield, West Midlands B74 2UD (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of PRIMIS Mortgage Network (PRIMIS), a trading name of Advance Mortgage Funding Ltd which is authorised and regulated by the Financial Conduct Authority. PRIMIS is only responsible for the service and quality of advice provided to you in relation to mortgages, protection insurance and general insurance products. Any other product or service offered by Caboodle Financial Services Ltd may not be the responsibility of PRIMIS and may also not be subject to regulation by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let.

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