Second charges are still the first choice for many

Second charges opportunities are growing for homeowners looking to raise capital for a variety of reasons such as property improvements, debt consolidation, a one-off event or purchase.

The market as a whole is in good shape, with the FLA reporting that second charge new business volumes are up in the first half of 2018 by 2%, compared with the same period in 2017. This is in-line with stable new business volumes reported by the wider mortgage market over the same period.

When a customer approaches a broker they will rarely ask for a particular product. They come with a need for finance and are looking to the broker to find them the most appropriate solution for their particular requirement and circumstances.

Sometimes clients also don’t know if there is actually a solution for them based on their circumstances. Many people don’t know there are second charge options available to them at a cheaper rate, or more suitable than a mortgage.

Second charge v remortgage

There are still many brokers at this point who will look to a remortgage solution, but, increasingly, we’re seeing more considering a second charge to run alongside the primary mortgage – which we’re happy to see.

This can be for a number of reasons, such as their mortgage is on a low rate, they don’t want to potentially remortgage onto a higher rate or there could be early repayment charges if their mortgage is still in a penalty period. Either way, it’s vital that all of the options and potential solutions are considered and that second charges aren’t overlooked.

It should also be noted that with the Bank of England recently hiking up the bank rate, and the expectation there are more rises on the way, customers who are already on a low-rate product don’t want to potentially remortgage onto a higher-rate product that could see their mortgage payment rise too.

Seconds are one of the tools available to help more customers in these situations and they can play a pivotal role in satisfactory outcomes. However, for a broker it can seem complicated as the number of lenders, products and keeping up-to-date with criteria updates can all seem a bit daunting.

That’s where Clever Lending can assist as we have a full market view of key issues and second charge products that can be of great assistance to brokers – rather than a remortgage.

As the market grows, we can help with placing cases, even those that seem at first to be complex and don’t fit the normal tick-box or mainstream lender products – and brokers may not be aware of the full range of options available to them – including some products with rates as little as 3.65%. View our products here.

More lenders are also now catering for a much wider profile of customer with their products. Those with a blip on their credit profile, CCJs (current or historic), irregular incomes, self-employed or even a combination of these, can now be potentially catered for in the second charge sector.

With our extensive lender panel, we have can search for the right lender with the most suitable solution for any given case, including those that may not be available to the standard broker.

The second charge market is a dynamic one that’s continually evolving. We have invested in quality and experienced staff to ensure we keep up-to-date on all aspects of the market and add value to what brokers can offer, whether that’s a second or first charge mortgage.

We see so many cases from across a broad broker network and have a deep understanding of the prevailing solutions at any given time, and we’re able to pass on this expertise to brokers.

Our recent investment in technology has helped to speed up processes and brokers are kept up-to-date throughout each stage of the process with regular updates and automated case tracking

We’re also making our case packaging process much more efficient with a new system, which will include full two-way integration, changeable workflows, drag and drop facilities, and provide a seamless application process for brokers and customers.

There are clearly still further opportunities with second charges that the sector can make the most of and Clever are at the forefront of these. Brokers can have confidence when passing a case to us as we are here to provide the right solution and make the process as smooth as possible.

Find out more about our second charge products here.