I recently arranged a second charge loan for a high net worth client seeking to raise further finance against his house. He had a five-bedroom family home valued at £2.5 million in South West London. He had a £1.25 million mortgage against it but needed to raise an extra £250,000.
As my client was self-employed with two businesses, as both a consultant and an interior designer, his income stream was complex and inconsistent. While his overall income was large at c. £200,000 p.a. he was also making large outgoings in school fees and other regular payments. This meant it would have been near impossible to obtain finance from the high street as they now calculate income by affordability.
Due to this and the fact that my client had an excellent rate for his current mortgage at 1.7% over the base rate for the life of the mortgage, I advised a remortgage to raise these funds wasn’t viable. I instead recommended a second charge loan against the property.
The criteria to meet a second charge loan is determined by monthly outgoings which my client was competently paying and consequently I arranged a second charge loan for the desired amount of £250,000.This was at 7.95% on an interest only basis for 20 years. As second charge loans are typically hard to obtain my client was very happy with this outcome which achieved exactly he client was seeking.