Mortgage advice

Second charge loans

A Second Charge mortgage is an additional loan secured against a homeowner’s property, distinct from their primary mortgage. Commonly referred to as ‘Homeowner Loans,’ these mortgages are exclusively available to homeowners and are often utilized to access additional funds. When considering a second advance, lenders assess the property’s value minus existing mortgage debt to determine equity, which serves as security for the loan. Alongside available equity, lenders evaluate the borrower’s ability to manage both mortgages, particularly in scenarios of potential interest rate increases.

Acquiring a second mortgage means holding two mortgages against the property, with failure to maintain payments risking the homeowner’s property. Upon property sale or relocation, the outstanding balance on the primary mortgage must be settled before any payments are made towards the second mortgage. Lenders typically apply higher interest rates to second charge mortgages compared to primary mortgages. These rates may vary based on factors such as loan size, term, credit history, and available equity in the property.

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    Mortgage lenders each have their own unique criteria when considering mortgage offers and loan amounts. Key factors include the desired loan amount, deposit size, employment status, income, credit score, monthly expenses, existing debts, age, mortgage term, credit history, and whether you’re applying individually or jointly. To secure approval, you must demonstrate your ability to repay the mortgage, typically assessed through your credit report. This comprehensive report covers various financial aspects like credit card usage, loans, overdrafts, mortgage history, utility payments, and accounts opened within the last six years. If you have a history of arrears, defaults, CCJs, debt management plans, or bankruptcy, specialized mortgage options are available, and we’re here to assist you in exploring them.

    To secure a mortgage, it’s crucial to amass a deposit of at least 5%, although a larger sum often results in more favorable interest rates. For existing homeowners, leveraging property equity can serve as a viable means to bolster the deposit. Our seasoned mortgage advisors can elucidate the benefits and potential impact on monthly payments should you choose to increase your deposit. Once you’ve pinpointed your desired property, our advisors meticulously assess your unique needs and financial circumstances, recommending a tailored mortgage product. They sift through a plethora of mortgage quotes, including exclusive offerings not readily available through conventional channels or comparison platforms, ensuring you secure the most advantageous deal. Upon selecting a suitable mortgage product, an initial fee is incurred to procure your Agreement in Principle (AIP), furnishing an estimated borrowing amount from the lender and empowering you to proceed with an offer on your chosen property. If your offer is accepted, we facilitate the engagement of a solicitor to oversee searches, surveys, and contracts, streamlining the entire mortgage application process from inception to completion, and ensuring a seamless outcome. For those contemplating remortgaging, we recommend initiating the search for a new deal approximately three months prior to the expiration of your existing arrangement, affording ample time to evaluate available options and submit your application. Should your mortgage be approved ahead of schedule, rest assured we’ll synchronize the completion date with the expiration of your current deal, mitigating any undue stress.

    Securing approval for a mortgage application relies on collaboration between you, your mortgage advisor, solicitor, and lender. At FutureBuild Finance, we streamline the entire process on your behalf, from initiation to completion. We facilitate seamless communication with your solicitor and lender, alleviating stress and hassle to ensure a successful outcome. Moreover, having all pertinent mortgage documentation readily available for your mortgage advisor expedites the process further.

    Mortgage lenders typically consider lending you up to five times your salary, taking into account factors like your age, dependents, and financial obligations. They assess your borrowing capacity based on what you can comfortably afford after covering expenses like bills, credit cards, and loans.

    Our friendly mortgage advisors can provide insight into your borrowing potential before initiating an application or credit search. By evaluating your specific situation, they guide you through the process, ensuring you approach the right lenders to secure the necessary loan amount.

    Even with a history of bad credit, such as arrears, defaults, County Court Judgements (CCJs), debt management plans, or bankruptcy, there are still mortgage options accessible to you. However, your selection of mortgage lenders and types will be somewhat restricted, and you can anticipate higher interest rates compared to those with a favorable credit history. Fortunately, our adept mortgage advisors maintain regular communication with lenders specialising in adverse credit situations, enabling them to provide comprehensive guidance on all available options tailored to your circumstances.

    To enhance your prospects of securing a bad credit mortgage, consider a few proactive steps. Firstly, ensure your presence on the electoral roll, demonstrating stability to potential lenders. Additionally, prioritize timely and full payments of all bills, and consider closing unused credit accounts, such as those from stores or catalogues. Exploring options like a credit builder credit card can showcase responsible financial management, while guarantor loans, managed diligently, can positively influence your credit score. Lastly, regular monitoring of your credit report is crucial for accuracy, allowing prompt correction of any errors with relevant lenders. Although improvement may not be immediate, particularly with a history of bad credit or missed payments, these strategies can gradually enhance your creditworthiness.

    At the core of securing a bad credit mortgage lies collaboration between you and financial experts. Through our guidance and expertise, we navigate the complexities of the mortgage application process. We facilitate seamless communication with solicitors and lenders, relieving you of stress and uncertainty. Having all necessary mortgage documentation readily available expedites the process, ensuring efficient progress towards your goal of obtaining a mortgage despite past credit challenges.