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Save your clients money with a third charge

Save your clients money with a third charge

Picture the scenario where your client wishes to capital raise but there is a second charge in place which they don’t want to clear.

Examples include:

  • A CCJ registered on land registry where no repayments are required.
  • A charge registered by HRMC
  • A charge registered to secure a private family / business debt.
  • A charge registered to secure an interest in a marital split.
  • A charge registered by second charge lender which is no longer lending (e.g. Firstplus)

Often these arrangements are not interest bearing or at low rates and clients can be forced in to paying them off in order to raise additional cash. That means borrowing more than they need and paying more interest.

Here’s our solution.
We have developed a new product with one of our lenders which will accept a third charge behind debts of this nature up to 75% LTV.
In most cases they don’t need consent from the second charge holder and will just need confirmation of the limit to borrowing.

Case study
A client recently wanted to raise £30,000 and another broker was forcing them to settle a £25,000 CCJ.
This took the total borrowing to £55,000, all of which was at a relatively high rate due to the CCJ.

We left the second charge relating to the CCJ in place – saving them any interest payments on £25,000.
Because they then only needed to borrow £30,000 they could afford to repay the loan over a shorter period.

End result

  • They borrowed £25,000 less – no interest charged on this.
  • They borrowed over a shorter term – reducing the interest paid on the remaining £30,000
  • Existing second charges remained in place.

Scenarios of this nature are quite common and often the best advice is to leave the second charge in place.
Now you can accommodate these through Promise.

One note of caution – our lender is unlikely to take a third charge behind bridging lenders or second charge term lenders with aggressive arrears charges.

www.promisemoney.co.uk

01902 585052


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    More than 50% of borrowers receive offers better than our representative examples. The %APR rate you will be offered is dependent on your personal circumstances.
    Secured / Second Charge Loans secured on land
    Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55.730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.2
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    Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

    More than 50% of borrowers receive offers better than our representative examples

    The %APR rate you will be offered is dependent on your personal circumstances.

    Mortgages and Remortgages

    Representative example

    Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

    Secured / Second Charge Loans

    Representative example

    Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

    Unsecured Loans

    Representative example

    Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


    THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

    REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


    Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
    Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

    Authorised and regulated by the Financial Conduct Authority – Number 681423
    The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

    Website www.promisemoney.co.uk