Interest Only.
It is still possible to raise funds on a Interest Only basis with second charge loans and still keep your existing interest only mortgage in place.
This should only be used as a short term option. eg. interest only for 3/6 years once credit or income issues have been resolved then move to repayment basis.
If you are taking a 25 year mortgage with the first 3 on interest only you must be clear that you can afford the repayment mortgage after this period.
Interest Rates
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Remember that it’s not just about rates but also affordability. A short term higher interest rate loan on interest only may be the solution.
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A £10,000 Mainstream Mortgage @ 4% over 25 years on repayment would cost £52.78 approximately per month
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A £10,000 2nd Charge Mortgage @ 6% on interest only would cost £50.00 approximately per month
Remember that in 25 years the repayment mortgage would be cleared, with interest only the original amount borrowed would still be owed. However, as a short-term option maxmum 6 years this option is a useful way of solving your current issues. After 6 years your credit rating should be improved or after 3 years your accounts should be in order.
These figures are just illustrative of the concept and do not represent a particular product. Full cost and APR figures will be provided once we have examined your personal circumstances and requirements.
NEXT STEPS |
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| Have a clear understanding of your income, number of years accounts, if any.If you are looking to move, is your current mortgage “portable”? | Obtain a credit report for your current address and any previous address in the last 7 years. |
Options
A. It may now be the case that you have accounts for the last years if these figures are satisfactory we can remortgage you with a new main stream lender at High Street ratesB. Keep your existing mortgage and put a 2nd charge top up mortgage in place. Possibly on interest only basis.C Keep your existing mortgage and put a 2nd charge top up mortgage in place. Possibly on interest only basis. Once you have accounts in place that show the required figs apply for a new mortgage to cover all your borrowing.D. Second charge mortgages are only available if you have a mortgage in this case the only option is to wait until you have one year’s accounts.E. Take out a 2nd charge mortgage possibly on interest only then when the credit issues have been removed from your credit file move all your borrowing to a main stream lender.F. There are some lenders who will accept some levels of poor credit, although these will be on higher rates this can be offset by being on interest only. You will have to balance the extra cost of this type of finance against your current rent, etc. It may be advantageous to purchase rather than continue renting.
It may now be the case that you have accounts for the last years if these figs are satisfactory we can remortgage you with a new main stream lender at high Street rates..Last updated 17/02/2014 Self employed 1 years accounts rates from 3.99% max loan to value 80% Self employed 1 years accounts rates from 3.44% max loan to value 75% Self employed 2 years accounts rates from 1.70% max loan to value 60% Self employed 2 years accounts rates from 3.25% max loan to value 90% Self employed 3 years accounts rates from 1.70% max loan to value 60% Self employed 3 years accounts rates from 5.49% max loan to value 95% Last updated 17/02/2014 If you believe that a new mortgage with one year’s accounts is the solution complete the mortgage enquiry form If you believe that a Second Charge Loan is the solution complete the 2nd Charge enquiry form If you want an informal or no obligation chat call our enquiry line |
