Second Charge Mortgages

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A Second Charge mortgage is, as the name suggests, a separate and additional mortgage to the homeowner’s main (or first) mortgage.

Second charge mortgages (sometimes known as ‘Homeowner Loans’) are loans that are secured against the borrower’s residential property, and as such, are available only to homeowners. In common with remortgages, second charge mortgages are sometimes used by homeowners to raise money.

When considering a second (‘further’) advance, the lender will take into account the value of the borrower’s home, less any mortgage owed on it. The difference between the two amounts is known as ‘equity’ and provides the lender with security against the loan. If for example, the home is estimated to be worth £300,000 and the amount remaining to be paid on the mortgage is £100,000, the equity is £200,000. In addition to the amount of equity that’s available, the lender will consider the borrower’s ability to service both mortgages if interest rates were to rise.

By taking a second mortgage, the homeowner will have two mortgages on their home. In common with a first mortgage, the borrower’s home will be at risk if he or she fails to keep up the mortgage payments.

When the property is sold, or the homeowner moves to a new home, the amount owing on the first mortgage must be repaid in full before anything is paid off the second mortgage.

Generally speaking, lenders charge a higher rate of interest on second charge mortgages than they do on first or main mortgages. The rate of interest (which may be fixed or variable) can also depend on the size and term of the loan, the homeowner’s credit rating, and the amount of equity that exists in the home.

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***** 5 out of 5

What were the circumstances that caused you to look for a financial adviser?

I sought advice from Daren 10 years ago because I was concerned that my portfolio was not being actively managed by my existing adviser.

How did Daren help you?

Daren confirmed that my portfolio had been mis-managed for some years and that I had been paying excessive hidden fees. He moved everything into a platform in a tax-efficient way and explained all costs, risks and potential rewards very clearly. He has continued to actively manage my investments as well as advise on my pension, personal and business taxation and property holdings.

Have you seen the outcome you were hoping for?

100%. Daren has been able to balance the performance of my portfolio (which is considerable better than when he took over) with using it to achieve my personal goals. His advice is clear, accessible and jargon-free and backed by flawless service from the whole Ginkgo team.

What could they have done better?

Nothing.

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What were the circumstances that caused you to look for a financial adviser?

We needed advice that would enable us to invest excess equity into the right investments.

How did Daren help you?

Daren spent time with us asking what we were hoping to achieve with our investments. He also then gave us the choice of risks, areas and returns that suited us best. He also secured property with Trust fund advice. With Daren’s help and advice on inheritance laws and tax we made our wills with confidence.

Have you seen the outcome you were hoping for?

Yes

What could they have done better?

Daren has given us excellent service and the office staff have always been very helpful and friendly. Would recommend Daren and Ginkgo Financial Services.

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What were the circumstances that caused you to look for a financial adviser?

1.I had left employment and set up a business and wanted a pension plan. 2. I needed to remortgage our home as the fixed term had expired. 3. Moving my last employment pension plan that was not performing particularly well to a high performing one.

How did Daren help you?

Daren and his mortgage broker effectively advised on all of the issues fully explaining the impact of the actions that were proposed. The service is always of a high quality and bespoke to me.

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For all three issues I have achieved the outcome I was looking for.

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Difficult to say how the service could have been improved. The high quality of service has been maintained by the use of MS Teams in lockdown.

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I co-own a production company and Daren has helped set up our pensions, insurances, investments and wills.

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He clearly explained everything we need and what we should invest in, he made it easy to understand and straight forward.

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We have seen a good outcome with Daren’s recommended investments and pensions.

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What were the circumstances that caused you to look for a financial adviser?

Pension, auto enrolment, insurance, shareholders protection

How did Daren help you?

Daren is extremely helpful, knowledgeable and approachable. He talked us through all the processes and made everything understandable and straight forward. Really great customer service from the whole team too.

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Absolutely

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Intelligent advice. Plain speaking. Excellent service. The three guiding principles of Ginkgo.

The best time to start a pension plan is now - and if you have already started, have a closer look at your arrangements to make sure you are on track.

The best time to start a pension plan is now - and if you have already started, have a closer look at your arrangements to make sure you are on track.

The government’s pensions freedoms regulations give holders of a personal pension greater flexibility in how they can access and use their fund.

With so many types of savings and investments, it’s wise to begin with expert advice on the potential risks and rewards for your personal situation.

Alternative investments are dynamic, higher risk investments in environments the UK government wants to support, such as future technology.

Planning now for the inevitable fact that we won’t be around for ever is one of the kindest things we can do for our loved ones.

Planning now for the inevitable fact that we won’t be around for ever is one of the kindest things we can do for our loved ones.

Crossing fingers is not enough. Protect yourself and your family financially by making money available, should something unexpected happen.

You probably already protect your business’s property and other assets. So don’t overlook your most valuable assets: your staff and shareholders.

A mortgage is one of the most expensive, complex purchases you’ll ever make. With thousands to choose from, it makes sense to take professional advice.

With advance planning and an effective tax strategy, you can avoid paying more to the government than you need to.

Our handy calculators were developed by mathematicians to help you get a handle on some of the figures behind your biggest financial decisions.

Financing property can be complex and costly

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Intelligent advice. Plain speaking. Excellent service. The three guiding principles of Ginkgo.

The best time to start a pension plan is now - and if you have already started, have a closer look at your arrangements to make sure you are on track.

The best time to start a pension plan is now - and if you have already started, have a closer look at your arrangements to make sure you are on track.

The government’s pensions freedoms regulations give holders of a personal pension greater flexibility in how they can access and use their fund.

With so many types of savings and investments, it’s wise to begin with expert advice on the potential risks and rewards for your personal situation.

Alternative investments are dynamic, higher risk investments in environments the UK government wants to support, such as future technology.

Planning now for the inevitable fact that we won’t be around for ever is one of the kindest things we can do for our loved ones.

Planning now for the inevitable fact that we won’t be around for ever is one of the kindest things we can do for our loved ones.

Crossing fingers is not enough. Protect yourself and your family financially by making money available, should something unexpected happen.

You probably already protect your business’s property and other assets. So don’t overlook your most valuable assets: your staff and shareholders.

A mortgage is one of the most expensive, complex purchases you’ll ever make. With thousands to choose from, it makes sense to take professional advice.

With advance planning and an effective tax strategy, you can avoid paying more to the government than you need to.

Our handy calculators were developed by mathematicians to help you get a handle on some of the figures behind your biggest financial decisions.

Financing property can be complex and costly

Second Charge Mortgages

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