2nd Charge - a cautionary tale

Sometimetimes in life we decide to take the easy option. There can me many reasons for this but if you look back and analyse what other options you had at the time, I am sure that this little delve into the past will only leave you with regrets. Easy options come with baggage and once the intial glow of finally making a decision has worn off, you are more than likely going to be left with the what ifs and that's when the recriminations start.

And so it is with the dreaded 2nd charge.

How simple we think as we come off the phone. Just a phone call, sign a couple of forms and the money will be in the account by next week. No long chats/meetings with my solicitor, no need to see if I can remortgage, no need to call a broker, no need to do any of the heavy lifting. What could be simpler!

I guess that it is only when you are ready to remortgage after the end of your current mortgage deal that things start to unravel. The realisation that you are going to have to increase your mortgage to pay of that little nasty 2nd charge tends to come along with a conversation that starts "Gosh, that second charge is quite expensive" and is closely followed by "I cannot understand why after two years I appear only to have repaid £1,000 from my £20K". A further investigation will probably reveal a rather large set up fee which in your haste to get the deal done you either overlooked or justified in your addled head at the time. Finally for some, it is the prospect of not having enough equity to remortgage which will tie them to the 2nd charge for the forseeable future that is the light bulb moment when they realise that the easy option was the wrong option.

My advice to anyone who is contemplating a 2nd charge over their property at the end of the festive period is to talk to their mortgage broker before you fall prey to the man in the shiny suit with white socks who will have that £10K in your account by the end of the week.