June 24, 2020

Case study: 15 days to secure a Second Charge mortgage during lockdown

modern apartments second charge mortgages

Loan type: Second Charge mortgage


Loan value: £150,000


LTV: 45%


Rate: 3.91%


Loan term: 24 years


Shifts in the economy will always have an impact on borrowing, and the COVID-19 pandemic was no exception. Sudden changes to interest rates and risk often mean reduced options for borrowers and this is when the specialist finance market really comes into its own. When the high street lenders are not an option, working with an expert finance distributor can provide access to a wider range of options and in this case, an often-unseen speed of delivery with a Second Charge mortgage.

The client:

A professional couple with a combined high income; Mr is the director of a commercial lettings firm and Mrs is a director of a business services organisation, looking to secure £150,000 for home improvements.


The situation:

carpenters working on project funded by second charge mortgage

The clients own two residential properties and were looking to borrow £150,000 for home improvements. Due to the clients already owning two properties their existing lender refused a further advance and there were no high street options available for capital raise. Their broker had explored all high street options and hoped specialist finance could provide a solution.


Solution:

adviser working on computer second charge mortgage case

This case was submitted to us during the COVID-19 lockdown, with the market somewhat closed, physical valuations not possible and the lending pool reduced - there could have been some issues. With physical valuations not a possibility, the Enterprise team were able to organise an automated valuation and manually underwriting the case. At a time when lenders were withdrawing products and rates were being increased, manual underwriting was a key part of the solution to ensure a realistic human approach to the case vs a computer.

Once underwriting was complete, the case had clarity and allowed the team to source a lender who could see the affordability despite the case elements and approved the loan.


Benefit:

couple smiling at mortgage being approved

Utilising Enterprise Finance as a specialist finance provider opened the clients up to a wider range of lending solutions, with nearly 20 years of experience even a global pandemic could not stop the team finding the right deal.

The expertise and manual underwriting process allowed for a common-sense approach to the case and secured a lender who could see that the affordability was still possible across the two properties. A computer-based approach at such an uncertain time in the market may have resulted in the case being declined by the lenders.


Result:

The team were able to secure a Second Charge mortgage of £150,000 in a remarkable 15 days from receipt of application. The broker was able to provide the client the funds needed to complete renovations.

If you have a client case which could benefit from our expert approach, we'd love to help. From bridging loans to Second Charge mortgages - we live and breathe specialist finance and are here to make your job easier. To find out more, drop us a line or give us a call on 020 8731 5333.