Equifinance provide a £100k second charge mortgage for three essential reasons

24 August 2016

Equifinance, the specialist second charge mortgage lender, moved swiftly to help a client with three key aspects of their finances by providing a £100,000 loan which highlights the various uses of homeowner loans in one transaction.

The client was referred by a broker, who was struggling to get the finances required for debt consolidation and home improvements with the client’s first charge lender due to a small payment issue two years previously. However, since then the client had kept up all payments in an exemplary manner. Also, the client was on a low, fixed rate mortgage still within the early repayment charges period so it wasn’t wise to consider a re-mortgage. The high loan amount excluded the possibility of unsecured funds, so a second charge mortgages was the solution chosen.

The reasons for the £100,000 loan requirement was to clear credit card debt with a lower rate repayment than the cards, and to undertake some essential home improvements and repairs to the property.

The improvements would result in making the house more marketable and increase its value should they wish to sell. Clearing the card debt and maintaining repayments would also help repair their credit profile, opening up the opportunity for better financial products and mortgages in the future.

In summary the benefits to the client were threefold:

• Improved marketability of the property post works, adding value to their main asset
• Consolidation from a credit card to a lower rate with Equifinance
• 1st Charge left alone to gain longer term payment history enabling the customer to consider re-mortgage once out of ERC’s

The affordability assessment was good, with the client in full time employment with a steady income, a good two year repayment record across all outgoings and plenty of equity in the property at 45% LTV.

Tony Marshall, Managing Director of Equifinance commented: “This is an excellent example of how second charge mortgages are a real option for many customers looking to not only get their finances back on track, but also enabling a borrower to increase the value of their primary asset – their home. And in addition, opening up a route to a better re-mortgages product in the future through an improved credit profile.

“The awareness of the many uses of second charge mortgages is growing and it’s cases like this that highlight a series of benefits to customers looking for a positive outcome even when their mortgage lender has said no to further finance. Being a specialist lender in this sector, we can work through an application and look for ways to provide homeowners with the funds they need to improve their house and clear debts that have built up over the years. We take the view that there is usually a way to lend and work with brokers and clients to that end.”