Wednesday, October 28th, 2020
Amidst the uncertainty of the COVID-19 pandemic, whilst some UK homebuyers and home movers have been enticed by the temporary stamp duty holiday, others have decided that improving their existing property might be a more attractive proposition than moving to a new house.
Once the initial decision has been made, it becomes a question of how to raise the finance required to undertake the desired changes. For some, this involves utilising credit cards or taking out an unsecured loan, for others, other solutions include a second charge mortgage or remortgaging the property in question to release some equity.
Where the capital that will be required is fairly substantial, credit cards, or unsecured personal loans may not be feasible options (due to the restrictions many lenders place on the amount they will lend and, also, the loan terms they offer). Whilst equity and affordability will always be an important factor when calculating what may be possible under a second charge mortgage or remortgage, in many cases, there can be more flexibility.
When comparing a second charge mortgage to a remortgage, the key differences are that a second charge mortgage is completely separate from the existing mortgage, is likely to be with a different provider, and will have a slightly higher interest rate than a remortgage.
For those unable to obtain funds from their existing mortgage provider and/or may face significant penalties were they to leave their existing lender in favour of a complete remortgage with another lender, a second charge mortgage could be an option.
The process of crunching the numbers and deciding between various products can be complex as there are always multiple factors involved. For this reason, when preparing to raise the capital required, many homeowners will use the services of a professional mortgage broker, such as ourselves here at Caboodle Finance, who will provide expert advice as to whether either a second charge mortgage or remortgage would be the most suitable solution.
With all this in mind, if you would like to know more about these options and what may work best for you and your plans, please call Caboodle Finance of Sutton Coldfield, Birmingham on 0121 308 9114 to speak in complete confidence with one of our friendly mortgage experts. Alternatively, just access our online form HERE and one of our specialists will be back in touch.
We very much look forward to hearing about and advising you regarding your project.
Caboodle Financial Services Ltd
Mere Green House
46-48 Mere Green Road
West Midlands B75 5BT
Telephone: 0121 308 9114