February 21, 2020
Debt is climbing in the UK, with the average personal debt in the UK coming in at £3,216 at the start of 2020. There are various ways to consolidate short term debt into an affordable monthly payment over a longer repayment term. One that has seen a huge increase recently is Second Charge mortgages. This case study highlights how our efficiency, expertise and very speedy completion enabled the client to address his monthly outgoings.
Loan: Second Charge mortgage
Loan term: 16 years
Completion: 3 days from customer application received
The client owned his own home - a freehold, detached 4-bedroom property.
The client wanted to address his monthly outgoings to achieve a more manageable payment. His outgoings were £300 more than his monthly income and he had been relying on his credit cards and overdraft to get by.
He wanted to address his outgoings to build up savings each month and wanted to free up an amount of at least £700pm.
The client also wanted to reduce the overall level of interest being paid. Before consolidation, the client was paying an average interest rate of 20.20% on his credit cards and an overdraft.
The solution in this case was a second charge mortgage. By opting for a second charge mortgage over a remortgage you will avoid early redemption charges that remortgaging can incur. The client would be able to pay off their existing credit cards and overdraft and replace it with a monthly payment.
We are an experienced specialist finance distributor dedicated to intermediaries, and by using us you open up the client to an array of specialist knowledge and a larger range of lenders, which naturally gives more options in terms of products and rates.
Our dedicated, proactive broker service and support results in high conversion rates and customer satisfaction - ranked highly by Feefo. Our clients use us because we cut out the complexity of specialist finance.
Using the second charge mortgage our client was able to pay off his credit cards and overdraft and has seen his overall monthly interest rate drop from 20.20% to 4.619%, and his monthly residual income was increased to £1,189 per month. The second charge mortgage enabled him to have a savings pot and be more conscious of his debt expenditure and felt this had broken the cycle of his debt and gave him a fresh start with his finances.