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Do you need a second mortgage ?

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What is a Second Mortgage?

A second mortgage is another lenders mortgage taken out without redeeming the first lenders mortgage that was, and still is, with the first mortgage lender.

The second mortgage lender becomes second in the queue, so will not get it's mortgage repaid until the first mortgage lender gets it's mortgage repaid (a "financially binding, legal  pecking order" is established)

This obviously puts the second mortgage lender in a bit of a precarious position, and the second mortgage lenders interest rate is normally higher then the first lender, to try and balance the risk it is taking.

 It may not be necessary to get a second mortgage if it is possible to get a "further advance" from the first, and main lender.

Sometimes referred to as a "top up" loan, it simply means going back to lender number 1 and asking for more money.

It is often the case that second mortgages are taken out by borrowers who have already approached their first lender and been refused.

Essentially, a second mortgage is a secured loan on your property, and like any secured loan or mortgage, your home is at risk if you cannot maintain repayments, or put another way (in keeping with Financial Conduct Authority rules) YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

In terms of security to the two lenders, the second mortgage lender will not get repaid until the first mortgage lender has had it's debt completely satified (the "pecking order") so expect to have to accept a higher interest rate.

A second mortgage calculator can be found here. Simply type in the amount you want to borrow on your second mortgage, a term of years for the repayment period and an interest rate.

A second mortgage broker can be contacted here

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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