2nd mortgage loans UK
A 2nd Mortgage loan is a loan taken while the 1st mortgage is still being paid off. A 2nd mortgage may be preferable to remortgaging the existing mortgage loan. The 2nd mortgage loan will usually be secured against the existing home equity.
Getting a second mortgage loan is a way to be able to invest in the UK housing market and take advantage of the growing buy to let sector.
To get a second mortgage lender you will need to meet certain lending criteria. This will be a mixture of:
- Equity - deposit.
- Sufficient Income to mortgage ratio
- Issue of affordability. How much can you afford to pay?
- Track record in paying previous mortgage payments / credit rating.
However, the lending criteria are usually less strict for a 2nd mortgage. Therefore, it is easier to get the 2nd mortgage approved
Advantages of 2nd Mortgage Loans.
- Consolidate debts which are accruing a higher interest payment.
- Invest in a second home, which can be rented out to earn income. In certain areas, the rentable income may be sufficient to pay the mortgage repayments.
More on Buy to let mortgages
The UK housing market is currently experiencing a degree of uncertainty. For the latest prospects for UK interest rates and UK housing market see these updated blog entries
Different Types of 2nd Mortgage Loans