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Second Charge Loans | Second Legal Charges - MT Finance

second charge loans

A second charge bridging loan could be the ideal solution for those who already have a mortgage secured against their property but require further funds for a short period of time.

Second charge bridging loans can be used for many reasons, such as purchasing an investment property, business expansion, or redevelopment of an existing property, to name but a few.

At MT Finance, we believe a second charge bridging loan is about empowering borrowers to take advantage of time-sensitive opportunities that can make or save them money.

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product features:

  • Rates from 0.85%
  • Loans from £50,000 – £10,000,000
  • Terms from 1-24 months
  • Up to 65% LTV
  • Residential & semi-commercial property
  • Adverse credit, CCJs and arrears accepted
  • Owner occupied residential property for business purpose use
  • No up-front fees, no exit fees, no ERCs
  • No credit scoring

our process


  1. step 1

    the
    enquiry

    You can apply one of three ways. You can either call us to speak to one of the team directly, send your enquiry via email, or fill in our Quick Enquiry form. Alternatively, you can Request a Callback and one of our experts will be in touch with you when convenient.

  2. step 2

    the
    offer


    We will review your enquiry and if our criteria matches your requirements, we will review and respond with an Offer in Principle (OIP). We can usually provide you with an OIP within 2 business hours. If you're happy with our offer, simply sign it and email it back to us.

  3. step 3

    the
    valuation


    We will instruct a RICs surveyor from our panel to value all properties offered as security for the loan – our valuation reports are typically produced within 72 business hours. Whilst we wait for the valuation report, we will need your solicitor’s details.

  4. step 4

    the
    solicitors


    We will send your solicitor our Checklist of Requirements. If the valuation report is acceptable for the loan to proceed as per the terms agreed, we will confirm this to your solicitor and then issue the mortgage deed for your witnessed signature.

  5. step 5

    funds
    released


    Once our solicitor is in receipt of all satisfactory replies and supporting documentation, we are ready to go! Within 24 hours of receipt of the report on title, we arrange the transfer of funds to your solicitor to complete the transaction.


we are a leading property finance lender

providing fast, flexible and transparent solutions including:

Bridging Loans

We believe a bridging loan should either make or save a borrower money. Our streamlined process allows us to cut through delays and deliver funds exactly when, and how, they are needed.

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Refurbishment Loans

Our short-term refurbishment loan products are available to property investors, landlords and developers who are looking to upgrade their investment assets with speed and minimum fuss.

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Auction Finance

The main benefit of auction finance is the speed at which funds can be delivered. MT Finance is able to deliver funds in a matter of days and we can approve an application prior to auction.

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Property Conversion

Our heavy refurbishment product is designed to help property investors and developers fund a renovation with speed. We can also provide funding in stages to keep the costs down.

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Second Charges

A second charge bridging loan could be the ideal solution for those who already have a mortgage secured against their property but require further funds for a short period of time.

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Property Purchase

A short-term loan from MT Finance is an effective means of raising funds quickly, enabling landlords and property investors to take advantage of investment opportunities in the buy-to-let market.

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Business Funding

Whether funds are needed to acquire stock, provide additional capital to stimulate growth, or to facilitate a new venture, MT Finance is committed to providing liquidity to the SME sector.

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Urgent Transactions

We can make lending decisions within hours of initial enquiry and release funds in less than a week, preventing borrowers from missing out on time-sensitive opportunities that come their way.

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  1. What Are The Pros of Bridging Loans from MT Finance?


    Speed - The speed of funds is the main benefit of using bridging finance, with deal completion often within an average of 1 to 6 weeks. When compared to a typical mortgage that can take weeks and months to get a decision and complete, MT Finance can usually give indicative terms on a bridging loan within 24 hours.

    Our goal is to help streamline the process for you as quickly as possible, whilst carrying out all essential checks on you and the property. So, if you have a property that is sought-after or being purchased at an auction, our team is ready to help you complete as fast as possible.

    Become a Cash Buyer - With bridging loans, you are converted into a cash buyer, allowing you to avoid the traditional delays associated with property chains and helping you to complete on a property immediately. With chains often being the main reason that a property purchase is delayed, you can avoid a lot of headaches to complete the deal as soon as you can - making it ideal for property buyers, developers, and investors.

    Flexible Borrowing - Bridging finance reviews every candidate on a case-by-case basis, making it far more approachable than mainstream banks and lenders. MT Finance is able to take an individual view on a customer, their property and their history, which results in providing more bespoke terms for you and your project. With the option to borrow large sums over 1 to 24 months, we are pleased to offer a flexible arrangement to suit your requirements.

  2. What Are The Types of Bridging Loans?


    Open - With an open bridging loan it means that the end date or repayment date is not yet finalised. Your exit might be to renovate and sell the property at a higher price, but the date is not yet confirmed. In most cases you will be required to pay back the loan within 24 months or refinance at this point under different terms.

    Closed - With a closed bridging loan, you will have fixed terms and a clear repayment date. This could be from buying a property through an auction, purchasing a new home before being able to sell your own one or even transforming a property and renting it out through buy-to-let.

    First or Second Charge - MT Finance can offer bridging loans by way of first or second charge. As first charge, this takes priority as the first payment to be collected from the property each month. As the second charge, this is the second priority when it comes to repayments against a property. If you have an existing mortgage, your bridging loan will typically be your second charge, also known as a second mortgage.

    Fixed or Variable Interest - A bridging loan will have either fixed or variable rates, whereby the rates you are charged will stay the same throughout the loan term (fixed) or they are variable and will change during the loan term.

    Bridging Loan Example

    Our client required £128,009 to undertake a heavy refurbishment on one of their rental properties which included a loft conversion, downstairs extension, and a renovation throughout. Within 2 weeks, we delivered a second charge bridging loan of £128,009 against their additional rental property at 37.8% loan-to-value, with interest retained at 0.75% over a 12-month term.



FAQs


A second charge loan is a loan for those who already have a mortgage secured against their property but require further funds for a short period of time.

It is often referred to as a ‘second charge’ because it becomes the second priority to your main mortgage, which is known as your ‘first charge.’

Second legal charges are a common way to raise extra money based on equity that you have built up in the property.

Landlords and business owners may use second charges as an alternative to remortgaging if the rates are not very favourable, they have adverse credit or have been denied elsewhere due to being self-employed.

  • Property based in England or Wales
  • Employed or self-employed
  • Must have equity in the property
  • Subject to valuation of property
  • Must be up-to-date with mortgage repayments

Second legal charges are used by individuals and businesses to raise extra finance.

For instance, a landlord could take out a second mortgage against a property he owns in order to free up some cash, carry out building improvements or finance an extension to the building.

For business owners, a second mortgage could be used to access funds for hiring new staff, purchasing new stock or investing in marketing.

MT Finance offers up to 65% LTV of the property’s value, based on how much equity you have in the property and other factors such as the property’s value and your affordability.

The amount you can borrow is typically a little less than the first mortgage. This is because the second charge is now the ‘second priority’ when it comes to making repayments on the property each month.

The combined debt on your existing mortgage and the second-charge cannot be above the stated maximum LTV.

Second charges can be an effective way to raise money, but it is also noted that you are adding more debt to your property and this could be at risk of repossession if you do not keep up with repayments.