Remortgage Vs Second Charge Mortgage

There’s often a debate about whether mortgage brokers should ‘advise’ clients who want to raise additional funding to remortgage or to look instead for a second charge solution.

In reality, until a broker has spoken to a client to assess their individual circumstances, it’s impossible to say which is the most appropriate product. Most people are familiar with the idea of remortgaging, that is switching your existing mortgage to a new deal with either your current or another lender. However, many of us are less sure of what a second charge mortgage is.

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Here we will give you a quick introduction to second charge mortgages, and an overview of the circumstances that might make this product more suitable for you.

What is a second charge mortgage?

With a second charge mortgage, often just called a second mortgage, rather than switching your deal you retain your existing mortgage. You then take out a second loan secured against the value of your home. This second charge is often a good alternative to an unsecured loan particularly if you have a poor credit history.

Choose your broker carefully

A problem with making an informed decision about which is best for you, is that many brokers don’t have the ability, access and/or experience to assess both first (remortgaging) and second charge options.

This means they are most likely you to steer you down the route that they are most comfortable with. That may not be in your best interests.

In addition, broker costs may vary between remortgaging and second charge products. At Simply Adverse, not only are we experienced in both types of products, but our broker fee will be consistent whatever decision you make.

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Why remortgage?

There are a number of reasons why you might to choose to go down the remortgage route. These include:

Remortgage Vs Second Charge Mortgage


Before remortgaging though it’s worth bearing some things in mind. Firstly, you should check that you won’t incur any penalty charges if you settle your current mortgage early. These will often show on your paperwork as an Early Redemption Charge or an ERC. In addition, if you are happy with your current deal, for example you have a particularly low interest rate, you may be better retaining this and considering looking at a second charge mortgage.

Why consider a Second charge mortgage?

Again, there are a variety of reasons why a second charge mortgage would be a good choice in particular circumstances.

Often a second charge mortgage is useful where your credit history has worsened, or you have had some form of adverse credit since your last mortgage. Key examples of this are raising additional mortgage funds when:

Does my credit history influence which option I should take?

As we’ve already mentioned, a second charge mortgage might be the most appropriate choice for you if you have recorded adverse credit since you got your existing mortgage. However, either option could be available for you regardless of your credit history depending on your circumstances (read more about second mortgages with bad credit).

As we always stress at Simply Adverse, these decisions depend entirely on an individual’s particular circumstances. As adverse credit specialists, we understand how important it is to look closely at why you recorded adverse credit in the first place, before making any decisions on future financial products.

Talk to us today

Simply Adverse brokers are experts in finding the most appropriate mortgage products for clients with poor credit histories. We won’t recommend a product that is not right for you.

If you’re not sure whether remortgaging or a second charge mortgage is the best choice for you, we will consider all your options before recommending a route to go down. Many brokers can’t offer this breadth of experience.

We won’t rule anything out, or anything in, until we’ve spoken to you, and looked at your financial circumstances and credit history. As we said at the start, until a client’s individual circumstances have been assessed, it’s impossible to know what is best.

So, contact us now.

call 01245 330163 For A Free Quote
Lines Open: Mon-Fri 09:00-20:00 and Saturday/Sunday 09:00-17:00. Alternatively request a call back at a time convenient to you.
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Do You qualify?
It's quick & easy. No credit check.
Your home may be repossessed if you do not keep up repayments on your mortgage.

Terms & Conditions

Fees vary according to individual circumstances and we will agree our fees with you before we undertake any chargeable work. This fee is for advice, research, recommendation, implementation (e.g. application, administration of arranging the loan). We will also be paid by commission from the lender.

Our typical broker fee is £1995. We typically charge up to 6% of the loan amount, dependent upon the severity of adverse credit and the lender being used. For example, on a loan of £100,000 we would charge up to £6000.

For second charge mortgage applications our typical broker fee is £1995. We typically charge up to 10% of the loan amount, dependent upon the severity of adverse credit and the lender being used. For example, on a loan of £40,000 we would charge up to £4000.

Our fee is payable upon receipt of your mortgage offer, we do not charge any upfront fee for identification of any potential solutions.

Legal Information

Simply Adverse is a trading style of Simply Investment Ltd. Simply Investment Limited is an Appointed Representative of Simply Lending Solutions Ltd who are authorised and regulated by the Financial Conduct Authority FSR Number 745164. 

The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Simply Investment Ltd. Registered in England and Wales Company no: 06528590. Registered Office: Runwell Hall Farmhouse, Hoe Lane, Rettendon Common, Essex, England, CM3 8DQ.

Simply Adverse
15 Runwell Hall Farmhouse
Hoe Lane
Rettendon
Chelmsford
Essex
CM3 8DQ

Email: info@simplyadverse.co.uk
Tel: 01245 330163

Help and Advice

Disclaimer

All content on the Simply Adverse website is believed to be accurate at the time of publication. However, this is a fast-moving sector and lender criteria and policies change regularly. For this reason, we always recommend that you speak to one of our brokers for the most up to date information.

Articles can only ever provide general information and do not constitute financial advice. Our mortgage brokers are fully regulated by the Financial Conduct Authority, and it is only by speaking to them that you will receive advice and information tailored to your individual circumstances. Your home may be repossessed if you do not keep up with repayments on your mortgage.

You should always think carefully, and seek professional advice, before securing other debts against your home or releasing equity from your home.

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