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How to Get a Fast Second Charge Mortgage
You can access the equity in property you own – your home, a holiday property, a rental property or commercial premises – to raise money for a wide variety of purposes. And this kind of finance can be arranged in a matter of days.
Written by: Sam O'Neill & Sam Hodgson
How Fast Access to a Second Charge Mortgage Can Be Useful
A second charge mortgage is also known as a "secured loan", or a "homeowner loan." It can be used to raise funds for renovations, to start up a new business, pay for school fees or clear some debts.
Sitting "behind" your primary mortgage on a property (second in line for payment), it’s secured against the value of your property, rather than primarily against your income.
That means it can be quicker to arrange, since it’s the market value that needs to be verified, rather than the more intricate details of your personal income and expenditure.
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When Might a Bridging Loan Be Useful?
Second charge mortgages are often simpler to apply for than a first charge, but while funds tend to be released more quickly than a standard mortgage, there are some circumstances where it won't be able to meet your needs.
Second charge bridging loans function similarly to second charge mortgages, but the expedited application process of a bridging loan means funds can be released even more quickly. They can be useful in several scenarios where short-term, immediate funding is necessary.
First charge mortgages are renowned for their stringent application process, but because a second charge sits behind your initial loan, the process is typically more lenient, with less emphasis on earnings and credit score. Funds from a second charge mortgage can be released in less than a month, but if you're interested in taking out a second charge loan and you need access to funds even more quickly than this, in many cases between 5 - 14 days.
And bridging loans are also more flexible around the reason you may want to take out a loan. If you require capital to act under time constraints and the purpose of the loan falls outside what second charge mortgages are tpyically used for, you could use a bridging loan in these cirucmstances.
Second charge bridging loans can be used for a range of purposes, from quick renovation projects, to asset purchases and investments.
If you're unsure what financial product is suitable for your circumstances, it's worth consulting a financial adviser. A specialist broker can offer tailored advice and find the right product for you.
See what a bridging loan could cost you with our bridging loan calculator.
Here's our Head of Bridging, Sam O'Neill, explaining how a bridging loan can be used to fix a chain break.
What is a "Secured" Loan?
The "security" of a secured loan is for the lender, rather than you, the borrower. There is a risk that you could lose your property if you can’t keep up with payments. And interest paid out over the lifetime of a mortgage can prove costly in the long run.
For Example...
£10,000 borrowed at 10% over five years costs you £2,720 in total interest costs.
Borrowing £10,000 at the same rate over 20 years will more than halve your monthly repayments, but you will pay almost five times as much in total interest: £13,040.
But when it’s well-managed by a borrower, who either repays it quickly, or is easily able to absorb the additional monthly payments, this can be a form of finance that offers speed and flexibility.
How to Speed Up the Second Charge Mortgage Application Process
- Speak to your principle mortgage holder first, to check they will allow a second charge loan against your property. A number of residential mortgage lenders are notoriously reluctant, including Paragon and Santander.
- Have your documentation in order: two most recent payslips for each person named on the mortgage application, ID documents, and a copy of a recent valuation for the property the mortgage will be held against, if you have one.
- Use an experienced property solicitor (a mortgage broker can usually recommend an experienced and efficient firm).
Applying for a Second Charge Property Loan
A second charge property loan can help homeowners consolidate debts, raise money to make home improvements, or buy additional property.
It’s particularly useful for those who don’t want to change their primary mortgage deal but still want to raise additional funds.
We are experienced with second-charge, regulated and short-term finance. We're a whole-of-market brokerage, so we have access to the best rates on the market and we will always work with you to find the most suitable product that supports your long-term financial goals.
Working with a broker can ensure the process is as smooth and stress-free as possible. A specialist finance broker can take care of the bulk of the paperwork and guide you through your options.
To see what we can do for you, call us on 0203 900 4322 or book a free consultation below.
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