A second charge is a loan secured against your home.
It is like having another mortgage with a different lender to your main mortgage and is another way to use the equity in your home to raise money for home improvements. A second charge is commonly used when your existing lender will not allow you to raise additional money under the terms of your current mortgage arrangement.
Like a remortgage, or a further advance, a second charge loan will be subject to how much equity you have in your home along with an assessment of your ability to repay the loan based on the lenders affordability criteria.
The interest rate on a second charge loan may be higher than the interest rate on your main mortgage. However – a second charge loan can be an attractive option as the interest rate will generally be lower than that of an unsecured loan and the length of the agreement can be longer which helps to keep repayments to a minimum.
If you are considering raising equity from your home to fund home improvements feel free to click here contact us to arrange a free consultation to learn how we can help.
Please Note: The Mortgage Xchange is a partner of Scott & Goose LLP who are directly authorised by the Financial Conduct Authority under reference 661183. Your home may be repossessed if you do not keep up repayments on your mortgage.