A Secured Loan otherwise known as a ‘Second Charge Loan’ is a second mortgage against your residential or buy to let investment property. This ranks behind your main mortgage and allows you to use some equity value you have in the property as security for another loan.
Reasons for considering a second charge loan;
You wish to retain preferential terms for your existing mortgage, for example, a very low lifetime tracker interest rate.
You have an impaired credit history, failed credit score or an IVA (Debt Management Plan).
You are an older borrower who is struggling to get credit.
You have complex financial affairs.
You are self-employed, have short term employment history or have recently changed jobs.
You need a higher loan-to-value than is otherwise available.
You have recently started trading as a limited company, partnership or sole trader.
You need a loan for reasons not usually permitted by other forms of lending.
There is not a strict or set criteria for what a second charge loan can or cannot be used for. One of the advantages is the flexibility it offers, examples are;
Purchase a Buy to Let Property or contribution towards a Buy-to-Let Property deposit
Helping children and family financially
Interest rates for second charge loans are typically start around 4.5% per annum with minimal penalty tie-in periods.
Inter-financial recommends arranging a suitable life assurance and critical illness plan to cover the additional borrowing in the event of death or an earlier serious illness. We are able to assist you with this matter, if required.