Second Charge Mortgage and Secured Mortgage Loans

A second charge mortgage, second charge loan and Home equity loans, as they are sometimes called, are all one and the same thing

This is a process that enables you to release cash from your property by making use of the equity in your home. You can only do this of course if you have positive equity in your property.

To make things very clear the value of the equity in your home is esentially the difference between the current value of your home and the oustanding amount on any mortgage(s).

Taking out a second charge mortgage or secured loan isn’t the same as undertaking a complete house remortgage.

A second charge loan or home equity loan is really just a second mortgage, i.e. a loan secured on your home in addition to the main mortgage. It’s completely independent from your first mortgage on the property and could be placed with a different company to whom you have a mortgage.

In contrast, a simple remortgage consists of making fundamental changes to your existing mortgage. This can be beneficial to you but depending on the status of your first mortgage it may mean you incur early redemption penalties which can vary depending on the number of months left of the early redemption period. If this is the situation in your case then opting for a 2nd mortgage should be considered very seriously.

The major points to look at are as follows:

1) A second charge mortgage, second charge loan or a Home equity loan enables you to release cash from the available equity in your property without having to sell the house.

2) A second charge mortgage, second charge loan or a Home equity loan is separate from the first mortgage on your home.

3) You can use the cash released from the new loan for any purpose, including home improvements or a home extension, debt consolidation, to clear credit card debt, or purchase a second home or even for that longed holiday of a lifetime!

4) Second mortgages offer flexible repayment options and terms.

5) A second mortgage can be a low interest rate loan, subject of course to your particular circumstances.

6) They’re fairly straight forward to set up and administer but it’s always good adivce to use a specialist broker to take you through the whole process and establish you get the best deal for your needs and circumstances.