Benefits of a second charge mortgage

In the current climate of increasing interest rates, a second-charge bridging loan is a great way to access additional funding without upsetting your existing mortgage. 

Second-charge bridging loans can allow you to borrow more money at a lower cost than a traditional refinance. You can avoid paying high fees associated with refinancing by releasing equity on your property.

There are many benefits to a second charge bridging financing, including:

• Lower costs compared to a regular refinance

• Flexibility to repay the loan early

• Avoid upsetting your existing mortgage

• Access to additional funds at a lower cost

• Ability to tap into the equity in your property

• Potential tax savings

• Additional security

• Increased liquidity

What is a second charge mortgage?

A second charge mortgage is a way to borrow additional funds without upsetting your existing mortgage. You may have heard of a first-charge loan, where you take out a new loan to pay off your existing mortgage. However, there is another option available to borrowers who require additional funds for a short period. These types of loans are known as second-charge mortgages.

Second-charge mortgage loans are great if you already have a mortgage secured on your property but need additional funds for the short term. Usually, they are fixed for 12 months. Typically, the money is used to buy an investment property or renovate your existing property.

You'll find that interest rates on second-charge bridging loans are higher than those on first-charge bridging loans as the lender will take.

Using a 2nd charge mortgage loan means you keep your existing mortgage rate. There would be no changes to the existing mortgage terms and conditions. A second charge could allow for more flexible repayment terms, which could potentially save thousands of pounds in interest.

If you take out a second charge, you won't have to pay any extra on your existing mortgage, as the rate will stay the same!  You'll keep repaying your original loan at the current rate. 

Some mortgage lenders will charge a considerable sum for wanting to stop or switch an existing fixed-rate mortgage early. This is why taking out 2nd charge loan may be the best decision, as it will not incur any penalty as the existing mortgage has not been stopped. 

Our experienced mortgage  team would be more than happy to run a cost comparison for you. Contact us now on 01765 692 331

Furthermore, it is not quite so easy to obtain additional finance as it once was, with lenders scrutinising borrowers' finances more than ever to ensure loans are affordable should interest rates continue to rise. 

This is where specialist second-charge mortgage loan providers become useful, as they have their own criteria and will work to find a solution that meets individuals borrowing requirements.

How much can you borrow?

The amount you can borrow depends on the property's available equity and the loan's affordability criteria. The maximum sum you can borrow is 95% LTV. 

How can Property Link Homes help you?

Bridging loans will continue to provide significant financial benefits for a wide variety of people, not just those who might struggle to get finance elsewhere.

We are a team of specialist mortgage brokers based in beautiful Ripon, North Yorkshire, for over 30 years have helped thousands of clients secure mortgages and second-charge bridging loans. 

We understand that speed is essential in securing finance, so we work quickly and proactively to find the best deal for your situation and ensure the funds are with you as quickly as possible. 

Our team offer a fast, transparent, and stress-free service so please do contact us now to discuss your second charge bridging loan enquiry. We will be happy to answer all your questions.

To speak to one of our expert advisors call us on  01765 692 331