What do you do when the first charge lender won’t consent to a second?
Sometimes remortgaging isn’t best for the client as it could put them on a worse rate or incur penalties. Sometime a remortgage or further advance just isn’t an option.
Brokers come to us with these all the time and I thought it worth mentioning some of the options we have.
Last week we had a scenario where bridging finance was needed. Because the first mortgagee wouldn’t consent to a second charge the broker was faced with paying off the existing mortgage with a bridging loan – converting a high street rate to bridging rates – not a great outcome. We managed to place the second charge loan with a lender which would lend the extra £150,000 needed without consent. Despite the increased risk for the lender we secured a rate of 1.1% which is pretty good for second charge bridging in anyone’s books.
For those clients looking at term loans, our second charge department have other options up to 25 years and smaller advances up to 100% LTV.
If consent is declined, don’t give up. We may have a solution.
Give your Broker Sales manager a call on 01902 267444.
2 out of 3 borrowers get a lower rate than our representative example of a regulated secured loan below:
Mortgages and Remortgages
£80,000 over 240 months at an APRC OF 4.3% and a discounted variable annual interest rate for two years of 2.12% at £408.99 per month followed by 36 payments of £475.59 and 180 payments of £509.44. The total charge for credit is £39,873 which includes a £995 broker / processing fee and £125 application fee. Total repayable £119,873.
Secured / Second Charge Loans
£63,000 over 228 months at an APRC OF 6.1% and an annual interest rate of 5.39% (Fixed for five years – variable thereafter) would be £463.09 per month, total charge for credit is £42,584.52 which includes a £2,690 broker / processing fee. Total repayable £105,584.52.
£4,000 over 36 months at an APR OF 49.9% (fixed) and an annual interest rate of 49.9% would be £216.21, total charge for credit is £3,783.56. Total repayable £7,783.56.
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.
If you have been introduced to Promise Money by a third party / affiliate, Promise may pay them a share of any fees or commission it earns. Written terms available on request. Loans are subject to affordability status and available to UK residents aged 18 or over. Promise Money is a trading style of Promise Solutions Ltd. Promise Solutions is a broker offering products which represent the whole of the specialist second mortgage market and is authorised and regulated by the Financial Conduct Authority – Number 681423.
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