Second Charge Mortgages – The new regulatory regime

Friday, June 24th, 2016

Following changes to regulations impacting second charge mortgages (previously referred to as “secured loans”), it has now become increasingly important for anybody thinking of taking one out to seek independent and expert mortgage advice from a mortgage advisor like Birmingham’s Caboodle Finance.

Since 21st March 2016 (following the implementation of the European Mortgage Credit Directive or “EMCD”), the majority of these second charge mortgages now have to be handled in very much the same way as a standard first mortgage on a person’s home or investment property.

These changes have not only challenged new applicants, but also the lenders and brokers too. In order to ensure that the mortgage advice given on these second charge mortgages mirrors that which would be given in connection with a first mortgage on a home or buy to let property, many of the companies involved have had to quickly implement system upgrades and of course retrain their staff.

Re-Mortgage or Second Charge?

That said, three months on and with these changes well “bedded in”, ongoing product development by the lenders represents good news for consumers who will ultimately get more choice. The fact that most customers will now receive mortgage advice when taking out a second charge is a key factor given that for many, a second charge mortgage may well be a better solution than a remortgage for those looking to raise capital secured against their property.

Expert Mortgage advice could prove invaluable

There are numerous reasons why a second charge may be a more suitable solution than a remortgage and getting advice on this could prove invaluable, but as many brokers are still specialising in either mortgages or second charge mortgages, they are unable to make the necessary comparisons between the two and consequently may not be in a position to provide appropriate mortgage advice in all the circumstances.

Whilst in the future, some mortgage brokers may go on to form alliances with a second charge broker, (and vice-versa), these relationships will still need to be closely monitored by the industry regulator to ensure that consumer outcomes remain the highest priority.

Getting Mortgage Advice in Birmingham

What if you need some great mortgage advice right now? Well, that is where Caboodle Finance of Sutton Coldfield, Birmingham could really make the difference. Call us on 0121 308 9114 or just click HERE to contact us by email to get started today.

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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.

The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

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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