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A Second Mortgage, which is probably more usually referred to as a Secured Loan, is one of the many facilities that are available to the homeowner or mortgage payer.
Here we explain Second Mortgages and take a look at their potential advantages, disadvantages and problems, and look at alternate ways of raising funds. We also look at how we here at Shire Direct can help you!
Table of Contents:
So, what is a Second Mortgage exactly? Well a Second Mortgage (which is probably more usually referred to as a Secured Loan or a Homeowner Loan), is one of the many borrowing facilities available to the homeowner or mortgage payer.
'So how does the Second Mortgage work?' you may well be asking. Well the Second Mortgage (Secured Loan) is effectively a second mortgage on your property. By lending on a secured loan basis the lender can usually:
The lender registers a second charge at the Land Registry. By doing so, the lender ensures that in the event the borrower defaults on their loan payments, provided there is sufficient equity in the property, the debt will rank second in line to the main mortgage, and will be repaid from the proceeds of any repossession proceedings.
So, let's have a look at how a Second Mortgage (or Secured Loan) could be of benefit, over an unsecured loan product.
So, what are the downsides and potential problems of taking out a Second Mortgage / Secured Loan?
When you are looking to arrange finance, it's worth considering all the options available to you, and depending on the amount you are looking to raise, it is likely to be in your interest to compare raising the proceeds on mortgage.
You can generally do this in one of two ways:
The viability of raising funds by taking a further advance with your present mortgage lender, or on a remortgage, will naturally depend on your circumstances and requirements.
For example a further advance from your existing mortgage lender may not be possible or prudent, it may be that you have experienced difficulties with your repayment history, in such circumstances, high street lenders may not be prepared to consider your application.
By the same token, remortgaging your home and paying-off your existing mortgage might not be a good idea either! For instance, let's suppose you were looking to borrow an additional £30,000 on top of your building society mortgage where you were enjoying a fixed rate for the next three years. However, because of a recently incurred CCJ, the building society would not agree to a further advance.
The likely financing options open to you are to remortgage and repay your existing loan with the building society and at the same time raise the additional funds, or to borrow the £30,000 on a secured loan basis.
This presents three major downsides:
In these circumstances, a second mortgage would benefit your circumstances by allowing:
Absolutely! We not only provide mortgage funding, we are also licensed by the Office of Fair Trading under the provisions of the Consumer Credit Act, and we are therefore able to consider and arrange secured loans where they are likely to be more appropriate.
Remember, our qualified advisors are available to discuss the options open to you. So the first thing we like to do is understand your circumstances and requirements. Advice and service always come first at Shire Direct.
You'll find our service to be friendly yet professional, helpful and unstuffy, why not take a look at some of the customer testimonials we've received from previous customers, and see the good words they have had for us!
So, please don't hesitate to Contact Us if you would like to discuss your requirements, obviously without obligation! Our mortgage advisors are available on Freephone 08000 282 281 until 10.00pm every day (including the weekends!), or alternatively you may wish to enquire online at any time instead. In either case, naturally we'll carefully assess your circumstances, needs, requirements and aspirations and come up with the most suitable and appropriate solution for you, and we'll be delighted to provide you with an in-principle decision - whatever your circumstances!
Hopefully we've provided enough information and have successfully explained Second Mortgages for you, and their advantages, disadvantages and potential problems. Don't forget we're only ever a couple of mouse clicks or a free call away and would love to hear from you!
Mortgages/Remortgages: The overall cost for comparison is 9.8% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances. For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
Homeowner Loans: Rates from 8.9% APR variable, but typically 13.9% APR variable. Most customers are likely to receive a lower rate or the same rate as our typical variable rate - learn more about APR. Shire Direct also has a range of non-conforming loan plans with rates up to 19.9% APR. These plans are designed to help those who may have a more difficult credit history, including CCJ's and credit arrears, IVA and bankruptcy problems.
A broker fee of between 0% and 10% of the loan advance may be charged for arranging a secured loan.
All loans subject to status and secured on property.
The actual rate available will depend upon your circumstances. Written quotations on request.
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.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
Over £2,000 worth of Argos Vouchers to be won in the Shire Direct Grand Prize Draw 2008! Terms and conditions apply - please read article for full details.
Claim £100 worth of Argos Vouchers upon completion of your transaction throughout 2008. Terms and conditions apply - see our Vouchers Special Offer page for full details.
Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.
