What is a second mortgage?
A second mortgage, also known as a secured loan, is a funding option that uses a property as security. Usually, the property is your home, and the loan is taken out in addition to your current mortgage.
Using a property as security can reduce the risk to lenders, meaning that they may be more relaxed about who they lend money to. Because of this, you may find that you have a better chance of being approved. It also means you may be able to borrow a larger amount and you may qualify for a lower interest rate, compared to other unsecured loans.
However, since they are secured against your property, failing to keep up with repayments puts your home at risk of repossession. Therefore, it's crucial to carefully assess affordability before applying.
These loans serve various purposes and can assist with any legal financial need. We specialise in providing fast second mortgages from a range of lenders nationwide, so we may be able to help you.
Our loans range from £20,000 up to £1 million, with both fixed and variable interest options available.
Is a second mortgage a good idea?
It depends on your personal situation and what you need the money for. Common reasons for choosing this option include:
- Re-mortgage rates are expensive - When raising extra finance some people choose to ’re-mortgage' to a new first mortgage provider. However, if interest rates offered by the new provider are higher than your existing mortgage, it may increase the total cost of borrowing. Arranging a second mortgage for the extra borrowing will allow you to leave your current mortgage in place and may work out to be a cheaper option.
- Avoid early repayment charges – Some lenders have early repayment charges if you want to re-pay a loan earlier than agreed. These charges may also occur if you want to remortgage your property to raise extra funds. Arranging a second mortgage for just the extra borrowing means you will leave your existing mortgage in place and avoid any early repayment charges.
- Unable to get unsecured funding – The criteria for this option is typically stricter, as an asset has not been used as security. For this reason, you may find it harder to qualify for this option, particularly if you have any complex circumstances. Second mortgage lenders can be more flexible, so they are often able to help where others cannot.
- Borrowing money to fund large projects – With a second mortgage you are able to borrow from £20,000 up to £1 million. Therefore, if you have a large project that you want to undertake, this may be a good solution for you.
Before making any decisions, it is important that you think carefully about whether this is the right option for you. Speaking with a qualified mortgage advisor can help you understand if it is suitable and affordable.
How do you apply for a second mortgage?
We know that taking out a loan can feel like a big task, so we have tried to make our process as smooth and simple for you as possible.
To make the process easy we have outlined some key steps you will need to take to successfully apply. These are:
- To start you need to decide how much money you would need to cover your plans and how long you would like repayments to be spread out by.
- After this you can either call our experts or use our online form above to make an enquiry.
- Using our panel of specialist lenders, we will look through over 600 products to find the right loan for your circumstances. We will go through this with you, so you can decide if it is the right option for your plans. If it is, we will work with you to get your application finalised.
Our experts always want to help you find the right type of funding you need to achieve your goals, so you can be assured we will always recommend the best solution available for your circumstances.
How much can I borrow on a second mortgage?
The amount of money you can borrow depends on your circumstances.
Factors that are taken into consideration include your credit profile, the level of equity in your property and your income.
These are considered to ensure that we find you an affordable loan, which ticks all of your boxes.
Our advisors are skilled in assessing affordability, and they will always go through this process with you. This means you can understand how the product meets your needs.
We have loans available ranging from £20,000 up to £1 million, so we have access to products that are suitable for most situations.
What are the borrowing terms on a second mortgage?
Terms on this type of loan vary between different lenders. However, typically they have longer repayment periods available, compared to some other borrowing options. This may allow you to have some flexibility over your monthly payments.
Our team have access to a wide range of lenders and products, with terms ranging from 3 to 30 years. Therefore, it is possible that we have a product available that has a suitable monthly repayment term for you.
What are the rates on second mortgages?
The interest rate that you will be able to get will depend on the amount of money you want to borrow, the repayment term, and some other factors such as your credit history and how much finance you can afford to repay.
As a second mortgage broker, we deal with many different lenders. This means we can provide competitive second mortgage rates, with both fixed and variable options available.
Our main goal is to get you a competitive interest rate for your circumstances, so we will do everything we can to achieve this.
Does the amount of equity affect a second mortgage?
Yes, it does. Lenders will look at the amount of equity in your home when deciding how much they can lend to you. Equity is the difference between what you owe on your mortgage and the current value of your property.
In general, the more equity you have in the property, the more you will be able to borrow.
Can I get a second mortgage?
As long as you own a property, you may be able to get a second mortgage. The main qualifying factor for this type of loan is that you own a home, as they are secured against a property.
Before taking out this solution, it is important that you weigh up all your options carefully, as your property could be at risk of repossession if you fail to repay.
We can help you look for a 2nd mortgage and will do our very best to help you secure the right loan for your requirements.
How do I enquire?
We want to make the process of applying as smooth as possible. Here are the main steps involved in our application process.
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Step 1: Submit an enquiry
Fill out our enquiry form online or call us to speak directly to one of our advisors.
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Step 2: Speak to the team
After reviewing your enquiry, one of our experts will call you to discuss your situation.
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Step 3: We'll handle the rest
If we find you a product that fits your needs and you're happy, we'll take care of the rest for you.
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Step 4: Completion
Once all of the paperwork is completed, you will receive your funds.
