Black Book Finance can assist you with clients seeking a Second Charge Mortgage whenever appropriate – always with the assurance that any of your clients other requirements will always be referred back to you as the Registered Introducer.

Why a Second Charge?

Second Charge Mortgages come in to play where a first charge or further advance is not a viable option. This could be for many reasons, but a few examples include:

• Client’s circumstances may not qualify for an increased first charge.
• Client is self-employed and current lender has changed its lending criteria.
• Funds are needed more quickly than a first charge could be arranged.
• The nature of the existing first charge (e.g. competitive existing rate, or significant exit fees)

In any of the above examples, a Second Charge Mortgage, that often has more flexible lending criteria, would allow for the first charge to remain entirely unaffected.

If your client is looking to raise funds, and already has a competitive first mortgage, and/or one that would carry significant exit penalties (if redeemed or altered), it is essential to explore Second Charge Mortgage options too. In terms of cost, the sometimes-hefty exit charges of a first mortgage can outweigh the higher pay rates that come with a Second Charge – so a Second Charge can sometimes be the most cost-effective option.

Funds raised via a Second Charge Mortgage can be used for almost any legal purpose; such as paying school fees, paying off a tax bill, home improvements or even financing a start-up business.

Debt Consolidation is another popular reason for clients to seek a Second Charge Mortgage. This is fine of course, but it is worth noting that with cases involving the consolidation of personal unsecured debt we, and our selected referral partner, follow even stricter guidelines to ensure that the client is made aware of the various costs and other implications, and has considered the alternatives before proceeding.

The Black Book Service

Under MCD rules, even if you do not carry Second Charge regulatory permissions, you are still required to explain to your clients that a Second Charge option might also be available to them, whenever appropriate.

For Registered Intermediaries (with or without Second Charge permissions), Black Book offers a Client-Referral service, where we will advise your client with regards to their Second Charge Mortgage requirements.

On receipt of your written instruction (including confirmation your client’s formal consent), we will promptly contact your client. Once your client has accepted our Terms of Business Agreement, we will carry out a fact-finding exercise to assess your client’s needs. After conducting the necessary product research, a recommendation will be made as to the most suitable Second Charge mortgage product from our panel of providers, together with any related fees payable.

Should your client decide to proceed, we will then package and process the application through to completion and provide them with a Suitability Report detailing the reasons why we consider the product recommended to be the most suitable solution to meet their needs.

Black Book Finance will provide you with case progress updates throughout the process from the initial point of contact with us, through to completion.

Black Book Fees – Transparent & Fair

For advising on and arranging Second Charge Mortgages we will charge and retain a fixed client fee of £2,095, payable by the client on completion and irrespective of loan size. This fee covers the advice provided, processing and any directly related costs. Your client will only be required to pay the Valuation Fee where their property value is £500,000 or more, and only then when a full inspection report is insisted upon by the lender.

As the introducer, you may choose to add an additional broker fee, provided this has been formally agreed with yoru client of course, to be retained by you in full. In addition, we will usually receive a (variable) fee from the selected lender. Following completion of the loan and on receipt of fees, Black Book will send you 50% of any lender fee, plus 100% of any additional broker fee (over and above Black Book’s £2,095) that you selected to add at the time of you enquiry.

Black Book Finance has access to a comprehensive range of Second Charge Mortgage providers from across the market, to accommodate clients who are:

• 2 months (or more) employed
• 6 months (or more) self-employed
• Credit Impaired
• 100% of any additional income accepted
• Borrowing for tax bills, transfer of equity, bridge exits, lease extensions, or business purposes

With lenders who can offer:

• Up to 85% LTV (£30,000 maximum at 85% LTV)
• No early repayment charges (including with Fixed Rate products).
• Free, flexible and uncapped overpayments.
• Lending into retirement (using employed income, if still working post-retirement)

As a reminder, Black Book provides a ‘no cross-sell’ guarantee to all our registered Intermediaries.

Either call us on 0800 651 6511 or enquire online