Hi Is a 2nd charge mortgage the same as a secured loan ?

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margaret766
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by margaret766 » Thu Oct 12, 2017 9:46 am
Hi

Is a 2nd charge mortgage the same a a secured loan ? Credit fix ignored me for 8 months and then passed my details to select partnership who are badgering me to accept a ridiculous proposal which means I pay more off than originally owed on IVA .... I would appreciate any comments/assistance please.
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Foggy
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by Foggy » Thu Oct 12, 2017 10:03 am
If your proposal states "remortgage or extension" then they cannot force a secured loan on you. A remortgage isn't a 2nd charge mortgage -- it is refinancing the whole mortgage to a new, and in these cases, higher, loan to release equity. A secured loan would be a 2nd charge. not a remortgage.

Be aware that any IVA using post 2014 terms can and might have the option of a secured loan written in, as can a few pre-2014 with amended conditions. So, first, check exactly what your proposal and Chairman's Report states.
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Michael Peoples
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by Michael Peoples » Thu Oct 12, 2017 10:51 am
There is also the possibility that you may actually qualify for a remortgage which would mean your entire mortgage plus any additional equity could be moved to sub prime rates and your term could even be extended. A secured loan or second charge may actually be a better option.
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Foggy
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by Foggy » Thu Oct 12, 2017 11:03 am
As Michael points out --- the devil is in the detail and the relative figures do need looking at carefully.
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luluj
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by luluj » Thu Oct 12, 2017 3:06 pm
I have just supported a close friend in looking at remortgage v second charge and there were some good options on second charge which came in cheaper than remortgage. They are still deciding which way to go but it is defintely worth considering all options and seeking profesional help.
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Michael Peoples
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by Michael Peoples » Thu Oct 12, 2017 3:49 pm
My own mortgage is a lifetime tracker and I am currently paying less than 2%. If I had to raise money on the property a second charge would almost certainly be cheaper for me than switching the entire mortgage. I have a client with a tracker deal who is paying 0.72% interest only on his mortgage. He owes the bank £230,000 and his monthly mortgage payment is less than £140. He has negative equity but does not care as he knows he could never rent anywhere for that money.
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