What Are Some Second Charge Mortgage Lenders UK?
Second charge mortgage lenders vary from large banks and building societies to specialized financial institutions that focus exclusively on secured lending. Each lender has there own individual criteria which means that the one who can offer you the best deal will depend on their criteria andhow it aligns with your situation.
Some examples of second charge mortgage lenders we work with include:
- Tandem
- Together
- Pepper Money
- West One
- MT Finance
- Octopus Real Estate
- Equifinance
- Selina
- Precise Mortgages
- Octane Capital
- And more
Will Second Charge Lenders Ask Me for a Deposit?
Like with a remortgage, you don’t need a cash deposit for a second charge. The lender simply lets you release equity that you already own in your property for the loan.
Second Charge Mortgage Provider Criteria
1. Equity in Property
Lenders will assess the amount of equity you have in your home as this is what will be used as security for the loan. This calculated by looking at the property value minus your outstanding first charge mortgage balance.
2. Credit History
While second charge lenders may be more flexible than first charge lenders, your credit history still plays a crucial role. However, options are available for individuals with less-than-perfect credit scores, but these may come with higher rates or less flexible terms.
3. Income and Debt-to-Income Ratio
Your income and debt-to-income ratio help lenders determine your ability to manage additional debt. You'll need to provide proof of income and existing debt obligations.
4. Loan-to-Value (LTV) Ratio
This is the ratio of your loan relative to the value of your property. Second charge lenders look at a combined LTV (i.e. the total maximum borrowing of both the first and second charge combined). Different second charge lenders have varying maximum LTV ratios, typically up to 75% or 85%.
5. Purpose of the Loan
Lenders will consider the purpose of the loan. Second charge mortgages are generally more flexible regarding the use of borrowed funds and will often accept purposes ranging from home improvements to debt consolidation.
