Advantages of a getting a Second Mortgage

Unlocking a large injection of credit with a second mortgage

What would you do if you had the extra cash?

A second mortgage (also known as a second charge, 2nd mortgage or secured loan) enables you to use the equity (the amount you own) in your home as security to use against another loan.

Do I qualify for a second mortgage?

  • You need to be a homeowner, but you don’t need to actually live in the property to get a second mortgage.
  • You need to have equity in your property
  • You need to have a regular income either from employment or self-employment
  • You need to be 18 or over

Exactly as it sounds, if you take out a second mortgage, you’ll have two mortgages on the same property.

A second mortgage can provide you with lots of valuable advantages. You could:

  1. Borrow a large amount. With a second mortgage you could borrow up to £1,000,000 depending on the equity you have in your property
  2. Be approved without a perfect credit score. Because the loan’s secured on your property, you may be able to borrow with bad credit rating. So, second charge loans are a good option if you’re struggling to get approval for a personal loan (unsecured loan). That makes them a particularly useful option if you’re self-employed and are finding it hard to prove your income
  3. Spread the repayments over a long period. Although we’d encourage you to repay your loan over the shortest period that suits your budget, a second mortgage can be paid back over as long as 25 years
  4. Lower your monthly outgoings and free-up cash. If you choose to use a second mortgage for debt consolidation, you may be able to slash the amount you pay out each month on servicing debt. And, of course, the longer the term you choose, the lower the monthly repayments will be on your second mortgage. But note that the quicker you repay the loan, the smaller the amount you’d pay in interest overall
  5. Enjoy better value than you’d get from a remortgage. Many mortgages include an early repayment charge that will apply if you choose to move to another mortgage within a certain period. So, even though a remortgage or new mortgage may offer a better/lower interest rate, if an early repayment charge applies, you may be better off keeping your existing loan and taking a second mortgage as well
  6. Choose to overpay. If your finances improve, you’ll be free to repay more than you have to on your second mortgage, reducing the amount of interest you pay

Uses for your second mortgage

You can use your second mortgage for almost anything:

Add value to your property with home improvements

A beautiful, well-thought out new kitchen. A luxurious bathroom. A room in the loft so you can make use of some of that ‘wasted’ but valuable space. Maybe you’ve always wanted an extension. Or maybe you urgently need to renovate/repair your home. Whatever home improvement project you’re thinking of, from a simple freshen-up to an extension, using a second mortgage for a home improvement can be a great way to add value to your home.

Free-up money with a second mortgage for debt consolidation

We know what it’s like. It’s all too easy to end up with a combination of loans, credit cards, store cards and overdrafts. You end up with payments coming out of your bank account in all directions and at different times of the month. That’s why people sometimes choose second mortgages to enable them to roll-up lots of smaller debts into one, more affordable loan.

Secured loans also offer lots of flexibility over the loan amount and the length of time you borrow it over (the term). So, you could get your borrowing back under control with just one monthly payment that you can afford and sustain.

Cope with a big expense

Maybe it’s the right time to take the plunge and need to pay for a wedding and honeymoon. Or, it could be that you just need a reliable new car to get to work. A 2nd mortgage could pay for those big expenses that you just can’t put off any longer.

Things to consider with a second mortgage

Used responsibly, a second mortgage can provide you with valuable advantages. But note because this is a secured loan, if you fall into financial difficulties repaying either the first or second mortgage, your property could become repossessed and sold to repay the debts. The first mortgage would take priority, with any remaining funds being used to repay the second mortgage.

Before you apply

We have made the Loan.co.uk application process as simple as possible, but it’s even easier if you give a few things a little thought before you start.

Make sure you think about:

  • How much you want to borrow.
  • How long you want to borrow it for.
  • What you want the loan for.
  • The current value of your property.
  • How much you still owe on your mortgage.

Next, why not get a quote to see what your options are, it doesn’t affect your credit rating and only takes a couple of minutes. Please contact us if you have any questions at all – we’d be delighted to help out.

Apply for a second mortgage in just minutes

A skilled mortgage broker such as Loan.co.uk will help you get the second mortgage that fits your circumstances and needs, take you through what’s involved and explain your options.

We’ve made applying for a second mortgage quick and easy. Why not get your free, personalised quote now?

Related articles
Hoe to manage money better

What should I do to manage my money better?

Are your finances a mess? Don’t panic. Take a look at how you can plan, budget and manage your money better, including ways you can cut down those monthly bills.

Buy to let tax rules

Buy-to-let tax rule: is using a limited company better for tax?

If you are a buy-to-let owner, you could start to feel the pinch of the 2020 tax changes. What are your options to help prevent you from slipping into the red?

shop safely online

Beat the scammers and stay secure online

How to keep your money and personal information safe online in the world when online shopping has transformed the way we live? Here are few tips you can follow.

CMA_loyalty penalties_loyalty penalty_loan_and_mortgage

Is this the beginning of the end for so-called ‘loyalty penalty’ charges?

The Competition and Markets Authority (CMA) has taken a close look at how companies are penalising customers for sticking with companies rather than moving to better deals.

two young people drinking tea and doing research

What’s a guarantor loan and why should I be interested?

If you’ve been turned down by lenders for a personal loan or consolidation loan and have ‘bad credit’, a guarantor loan may well be an option worth considering.

consolidate debts

What should I consider when looking for secured loan?

A secured loan is provided by a lender, with the borrower using their home as collateral. Here are eight things you should think about before looking for a secured loan.

joint finances

What do I need to know about joint finances?

Considering joint finances with your partner? Read about things to consider before you decide to manage your money together with someone else.

a father doing paperwork and talking to his child

Should I remortgage with the same lender or switch?

You do not have to move home to take advantage of a more competitive mortgage. But why it might be a good idea to move your mortgage to another lender, and when it may be better to stick with your current lender?

Should I sell or renovate my home

Should I renovate or sell my home?

Deciding whether to move or improve your current home can be a big decision. To help you decide between renovating up or selling your house, we’ve looked at the good, the bad and the ugly of both.

buy to let loans

Is a personal loan better than using a credit card?

We take a look at personal loans and credit cards and explain how they work and why one is better than the other in certain situations.

Categories

Homeowner
Loans

Mortgages

Buy to Let
Loans

Credit
Help

What would you do if you had the extra cash?

Shall we get started on building your bespoke loan?

Share This