Are advisors missing second charge opportunities?

HMRC figures show that over 96,000 homes were bought during February, but new homeowners often have to spend even after the purchase is completed. This presents opportunities for mortgage advisors that many are not recognising at the moment.

One reason why purchasing the home is frequently just the start of the spending for buyers is that improvements are often needed. Whether it is undertaking refurbishments or adding entirely new rooms and other amenities, people often want to change a property into the home of their dreams after they have secured their mortgage and sealed the deal.

If that is not the case, they may be facing a situation where they have to pay back money to family members – whether it was cash borrowed to help buy the property itself or for something like stamp duty. In both of these scenarios, homeowners usually look to personal loans with high interest repayments.

Instead of that, mortgage advisors should be steering their clients towards second charge mortgage loans, which often offer lower interest rates and greater repayment flexibility. This will benefit not only the client, but also the advisor, who gets further work out of it.

Advisors should follow up their CeMAP training by researching the second charge market in depth. Many remain unaware that borrowers can take out a loan of that type as soon as they buy a home, with the result that both they and their clients are losing out. The second charge loan market is growing and it can be a real help to buyers.


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