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.