Many investors have equity within their portfolio or in their own residential property which could be released and used for further investment, however it may be that they are unable to or simply do not wish to re-mortgage as they are tied into a favourable fixed, tracker or interest only mortgage, in this instance a secured loan could be the answer.
A secured loan is an advance secured behind the existing first mortgage. Capital raising using a second charge mortgage offers both the means to retain the existing (and often preferential) mortgage product and release equity for further investment.
At an auction where speed is crucial, a second charge mortgage allows the investor to secure the deal quickly, often in as little as 5-7 days.
The second charge market has evolved to take its place as a key part of the overall funding toolkit. It gives investors the ability to structure the finance at will by allowing capital raising against both the portfolio and/or the main residential security.
It is important to recognise the opportunities which secured loans may offer, for example providing a cash injection into a business to purchase machinery, the purchase of leasehold premises, lease extensions, expansion to other locations or the exit of an existing bridging facility. Identifying these opportunities is where a specialist broker will come into their own, delivering a personalised service and focusing on achieving the right outcome for the customer.
If you are an investor looking at ways to capital raise, you have security in the form of your main residence or a property within your portfolio then a second charge mortgage may be worth considering.
For more information please contact us.