What is a Second Charge Mortgage?
A Second Charge mortgage, also known as "Homeowner Loans," is an additional mortgage separate from the homeowner's primary mortgage. This type of mortgage is secured against the borrower's residential property and is only available to homeowners. Unlike the primary mortgage, a second-charge mortgage can be obtained from a different lender and is used by homeowners to raise funds for various purposes such as renovations or home improvements.
The lender will assess the borrower's home value, deducting any outstanding mortgage balance to determine the equity, which serves as security for the loan. In the event of a sale or when the homeowner moves, the first mortgage must be fully repaid before any amount can be allocated towards the second mortgage.
