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Second Charge Mortgage
Second charge loans are secured loans since they use a property that you currently own as security.
You don’t have to own the property outright. It can be partially owned or even on a mortgage.
As long as you have some equity in a property, you can use that as collateral for a second charge loan.
As long as you have some equity in a property, you can use that as collateral for a second charge loan.
SECOND CHARGE MORTGAGE
Second charge loans are secured loans since they use a property that you currently own as security. The property you use as collateral doesn’t have to be the one in which you live. As long as you are the legal owner of the property, it can be used as security for a second charge loan.
You don’t have to own the property outright. It can be partially owned or even on a mortgage. As long as you have some equity in a property, you can use that as collateral for a second charge loan.
How much can you borrow?
This depends on how much equity you have in your property. Equity is the proportion of the property that you own outright. So, if your home is worth £300,000 and you have a mortgage of £140,000, that leaves you with £160,000 equity. Most lenders will lend c80% of the remaining equity which on this occasion would equate to £128,000.
What is a Second Charge mortgage?
Second charge mortgages are secured loans taken out against the equity available in your current home. The equity on your property is the value of your property less any mortgage owed on it.
For example, on a £200,000 house with an outstanding mortgage of £100,000, the equity (or the part which you own) would be £100,000. With a second charge mortgage you are borrowing against the £100,000 equity, that is referred to as having a second mortgage on a property.
How do second charge mortgages work?
A second charge mortgage is only available to homeowners, for second charge mortgages, you will need to have a sum of equity in your property that is at least equal to the amount of the loan you intend to secure against it.
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