What Not to Do When Taking out a Second charge mortgage
Posted in: Insurance
If you’re looking to renovate your kitchen and bathroom or have another home improvement project lined up, then taking out a Second charge mortgage could be an option for you. A Second charge mortgage could provide you with adequate funds, but there are other options available such as savings, a credit card, or a personal loan.
There are still risks attached when taking out a second charge mortgage and by avoiding these easy-to-make mistakes there’s no reason why a Second charge mortgage couldn’t be right for you.
Barely Read the Terms & Conditions
Different lenders will have different rates, repayment periods, and terms and conditions so you must ensure you read these thoroughly before proceeding. Use an established Second charge mortgage lender who has been established for over 10 years. Remember a Nemo loan is secured against your home so you must ensure you can afford the repayments or your home may be repossessed.
Whichever lender you use, working out the rate, repayment period and how much in total you’ll need is key. If you are in a fortunate position, you may be able to pay the loan off early, but some include early repayment charges so make sure you make inquiries with the lender beforehand.
Selling Your Home
Although possible, selling your home in which the loan is secured and buying a lower-value property may require you to partly or fully pay the loan off therefore making it difficult to move if you are not in a position to do this. You will need to consider this when looking at the term of the loan with the lender. If this is a particular concern to you, it may be worth seeking independent advice.
Don’t Forget About the Risks
Forgetting about the risks attached to a Second charge mortgage can lead to complacency in making repayments. The number one reason it is essential you plan ahead well and ensure you can afford to meet repayments is that otherwise your home can be repossessed.
Be vigilant when researching and taking out a secured loan and remember the list of what not to do: