Just Loans – Financial Loans Darlington

‘Just Secured Loans’ is the division of ‘Just Money’ dedicated to sourcing the best loan facility available from our extensive panel of lenders.

Secured Loans: All our loans for private individuals are currently secured on property, so are subject to available equity. A valuation may be required.

Loan Purpose: We can provide loans for a wide range of purposes, including debt consolidation, home improvement, car purchase – in fact if it’s legal, we can probably fund it!

Loan Amount: Loans are available from £5,000 to £2,000,000, and over repayment terms are from 3 to 30 years.

Fees: In most cases, an arrangement fee will be charged, which is added to the loan and only payable when the loan is approved, and funds release

What Is A Secured Loan (Second Charge Mortgage)?

A second charge mortgage is a mortgage which ranks in second place, behind your first charge mortgage lender. Previously known as a Secured Loan, it is essentially a loan advance which is secured against your property by way of a Legal Charge, and works in exactly the same way as your regular mortgage. Therefore, if you have a Second Mortgage, you will have two mortgage payments to make each month; one to your first charge mortgage lender, and one to your second charge mortgage lender.

When Might A Second Mortgage Be A Good Idea?

Although a ‘Re-Mortgage’ can often be the best way to raise further monies against your home, there are times when a Second Charge Mortgage may suit your requirements better. A good Mortgage Advisor should always look at both options for you when looking to raise money for you.

The main reasons why we may look to a Second Charge Mortgage for clients would be:-

You may incur Early Redemption Charges on your existing mortgage if you were to Re-Mortgage
You are currently on a very low standard variable rate mortgage
You have had CCJ’s or Defaults registered against you in the past 3 years, which would mean you could only re-mortgage to a much higher rate than you currently enjoy
You have had missed mortgage payments during the past 3 years on your current mortgage
You wish to use the funds for a purpose which would be unacceptable to most first charge lenders (see ‘What Can A Second Charge Mortgage Be Used For?)
Speed of Completion – Because you need not involve solicitors in the arranging of a Second Charge Mortgage, the application can complete far quicker than a re-mortgage (usually 2 – 3 weeks)
You may have a low credit score

How Much Can Be Raised on a Second Charge Mortgage?

Amounts range from £5,000 to £2,500,000, but of course it is dependent on your personal circumstances, how much can be raised. The following criteria needs to be assessed in order for a Second Charge Mortgage to be raised:-

Equity – this is the difference between the market value of your home and your current first mortgage balance. Different lenders will advance to varying ‘loan-to-value’ ratios. For example, if a lender will advance up to 85% LTV, they would assess it as per the following example:-

Property Valuation	£100,000
85% of this value (LTV)	£85,000
Deduct First Charge Mortgage Balance:	£53,000
Therefore, Equity Available:	£32,000

So in the example above, an advance of £32,000 could be considered. Loan-to-Values can be as high as 95% or 100% with some lenders, but the higher the LTV, the higher the risk is to the second charge lender, so this would certainly impact on the rates being offered.

Credit Status – different lenders will have different criteria in assessing your credit status, and deciding whether you meet their criteria. This will be a combination of credit score, credit profile, any adverse credit points, employment status etc
Affordability – Second Charge Lenders quite often have higher income multiples than First Charge Mortgage Lenders. This means that, where you may not fit the affordability model for a re-mortgage, you might fit for a Second Charge mortgage. However, affordability is the most important factor in arranging your mortgage, so it is very important that we fully assess all aspects of your income and expenditure, to ensure that the new mortgage is affordable for you in the long term.

Over What Term Can I Repay The Second Charge Mortgage?

Just as with a first charge mortgage, you can repay your second charge mortgage over any repayment term between 3 and 35 years dependent on your proposed retirement age.

If the Bank of England Base Rate Rises, Will My Payments Go Up?

Second Charge Mortgages can be arranged on fixed or variable rate terms. If it is important to you that your payments don’t rise, please ensure that your Mortgage Advisor is fully aware of your preference. Fixed rates will usually be slightly higher (0.5% to 1.0%) than a standard variable rate. However, if this gives the peace of mind that your payments will not change, this may be well worth considering.

If you proceed on a ‘variable rate’ mortgage, then your payments could potentially rise when the Bank of England move the base rate.

Your Advisor will be happy to give you illustrations on fixed and variable rates for you to consider.

What Can A Second Charge Mortgage Be Used For?

Second charge mortgages can be used for any legal purpose, including (but not limited to):-

Debt Consolidation
Home Improvements
Business Purposes
Raising a deposit to purchase a ‘buy-to-let’ property
Matrimonial buy-out of ex-partner
Paying a Tax Bill
Weddings
Holidays
And much more

Will I Be Charged Penalty Interest If I Settle The Second Charge Mortgage Early?

Many clients fully intend to redeem their mortgage before the end of the term. This may be by overpayments throughout the term of the mortgage, or more often, by re-mortgaging to a new lender. So will there be any penalties for this? The majority of our residential second charges have no early repayment charges. On certain plans, particularly if you wish to have a ‘fixed rate mortgage’ to protect against future rate rises, there may be a penalty during the fixed rate period. So always check the illustration you are provided with. A good advisor will always go through this with you, and make you aware of any potential penalties for early settlement

How to Apply for A Second Charge Mortgage (Secured Loan)?

Most Secured Loan lenders, only accept applications via specialist Mortgage Brokers. Not all Mortgage Brokers have permissions and authorisation to arrange these secured loans for you.

Just Money UK Limited are authorised and regulated to advise on, and arrange a Second Charge Mortgage for you. As independent, whole of market, brokers, Just Money can find the perfect product for your circumstances.

You can apply through the ‘Just Apply’ page of this website, or by calling 01325 469234.

Frequently Asked Questions