The benefit to
What might a secured
loan client look like?
A secured loan, also known as second charge mortgage, sits below the first mortgage and is secured against the property. A secured loan can help fund a number of things, from home improvements, holidays or, more commonly, provide a debt consolidation source.
A potential client may:
Mr and Mrs Livingstone from Leeds needed to extend their house due to a new baby arriving. Their credit report was good with some existing unsecured credit (cards and a loan).
Employment status - Employed with stable incomes
Property valuation - £700,000
Mortgage balance - £302,000
Mortgage Type - Repayment mortgage, BRT with HSBC, 0.1% above base rate
Loan sourced - Annual rate 5.5% and LTV 52.2%
Fluent arranged a low cost second charge mortgage for £63,000 over 24 years. By also clearing the customers’ existing credit, they obtained the funds for their extension and reduced their outgoings by £185pcm.
Benefit to client
They protected their low rate mortgage, obtained the loan for their extension and reduced their monthly outgoings.
Benefit to broker
They received a healthy commission payment. The clients were given the best advice by offering a second charge solution from an expert adviser. They obtained a product with limited ERCs and had the chance to review their protection needs. The broker is now in a great position to revisit and arrange a remortgage when the client is able to.