The market for second charge mortgages has increased by more than a quarter, in comparison to the same period in 2016.
The latest report to be produced by the Finance and Leasing Association also shows that new business volumes during August had risen by 11% on the same month last year. During August 2017, there had been second charge lending of £91m, and during the three-month period to August 31st, there had been second charge lending of £274m. In the 12 months to August, second charge lending totalled £974m.
According to the head of consumer and mortgage finance for the Finance and Leasing Association, Fiona Hoyle, the market for second charge mortgages performed strongly in August, and continues to do so. She said:
“A second charge mortgage provides a useful alternative where homeowners want to raise additional funds but do not want to change their existing first charge mortgage.”
Second charge mortgages are a secured loan, using the home of the borrower as security. A borrower can only have a second charge mortgage if they already have a mortgage, although they do not need to reside in the property. The loan uses the equity they already have in their property, and means that they will have two mortgages secured on their home. There are strict regulations in place for this type of product, along with others.
CeMAP qualified mortgage advisors learn about this type of mortgage and other products, so that they can advise homeowners and borrowers about their best options.