Second-charge mortgages – an overview for landlords
If you’re a landlord looking to raise funds for your buy-to-let property portfolio, you may have come across the term “second-charge mortgage”. But what exactly is a second-charge mortgage, and how could it benefit you? In this blog post, we’ll take a look at second-charge mortgages and how they could help you raise the funds you need as a landlord.
A second-charge mortgage is a loan that is secured against your property. This type of mortgage is often used by people who have already taken out a first-charge mortgage on their property and need to borrow more money. The advantage of taking out a second charge mortgage is that it can be easier to obtain than other types of finance, such as a remortgage or personal loan.
How second-charge mortgages work
When you take out a second charge mortgage, the lender will place a charge on your property after the first charge (i.e. your existing mortgage). This means that if you were to default on your payments, the lender would be paid before any other creditors.
The amount you can borrow with a second-charge mortgage will depend on the value of your property and your income. The interest rate you pay will also be determined by these factors. You can choose to repay your second-charge mortgage over a period of time that suits you, up to a maximum of 25 years.
What are the benefits of taking out a second charge mortgage?
There are several benefits that come with taking out a second-charge mortgage:
• You can release equity from your property without having to move house.
• The loan is secured against your property so it may be easier to obtain than other types of finance, such as unsecured personal loans.
• The interest rate on your loan may be lower than the rate you’re currently paying on your first mortgage.
• You can choose how long you want to repay the loan (up to 25 years).
• You can make overpayments without being charged any penalties.
So there we have it – everything you need to know about second-charge mortgages and how they could help you as a landlord raise funds for your buy-to-let property portfolio. If you’re thinking about taking out a second charge mortgage, be sure to speak to an independent financial advisor to get expert advice tailored to your individual circumstances.
Conclusion
A second charge mortgage could be a great option for landlords looking to raise extra funds for their buy-to-let portfolio. If you’re thinking about taking out a second charge mortgage, be sure to speak to an independent financial advisor first to get expert advice tailored to your individual circumstances.
