Things to consider before taking out a second-charge mortgage
Think over all your choices before taking out two mortgages.
Consider possible costs and fees as well as what would happen if you lost your work. How would you afford to make two mortgage payments each month?
We do offer comprehensive protection to safeguard against virtually all life events.
Affordability typically lower than a second mortgage and financial evaluations that apply to first mortgages also apply to second mortgages. As a borrower, you should think about organising your finances, looking for unused subscriptions, ensuring that payments are current, and reviewing your credit score in a manner similar to how you would if you were applying for your first mortgage.
Consult an impartial financial consultant if you are unsure if this is the best course of action for you.
Why get a second-charge mortgage?
Obtaining a second charge mortgage can be something you want to consider if:
- Remortgaging is not an option because your present mortgage has high early repayment costs (ERC) for switching or you have a very low fixed rate.
- Your financial situation has changed or your credit rating isn’t good, so if you refinanced, you wouldn’t be given a competitive interest rate. Your interest rate could be higher if you take out a second mortgage.
- It might be used to combine debt from personal loans and credit cards. However, you are using your house as security in the same way as your main (1st) mortgage.