Documents Required to Apply for Second Charge Mortgage Borrowing
Lenders adopt different policies, and the second charge mortgage process is no different – the documents you need may depend on which lender you apply for second charge mortgage borrowing from. However, there are a few pieces of information that all lenders will need to see:
- Copies of payslips and bank statements or accounts and tax returns if you are self-employed.
- Copy of your credit report (although the lender will normally access this directly).
- A valuation of the property and mortgage statement from the first lender.
- Proof of ID and evidence that you live at the property.
- Details of other debts and obligations that may affect your affordability.
If you intend to use a second charge mortgage for debt consolidation purposes, the lender will ask for details of all the debts you intend to repay through the second charge mortgage process and will account for the differences in outgoings when assessing affordability.
Average Duration of the Second Charge Mortgage Process
As second charge mortgage reviews will indicate, these products have fallen under the remit of the Financial Conduct Authority (FCA) since 2016, which means the second charge mortgage process includes several assessments to ensure a lender is offering secured financing responsibly.
Therefore, as an independent broker, the second charge mortgage we work through with you will be similar to that of a standard product, beginning with consulting your broker to discuss what outcomes you are expecting when you apply for second charge mortgage borrowing.
Once we have established the purpose of the loan, your equity ownership, finances and property valuation, we begin the second charge mortgage process by matching your requirements and circumstances with appropriate lenders.
When you are ready to proceed and apply for a second charge mortgage with your preferred lender, we help with the paperwork, application forms and supporting documentation, liaising with the lender throughout the second charge mortgage process.
Many lenders offer pre-approval, so you can fill in some basic information explaining what the borrowing is for, such as using a second charge mortgage for home improvement. If you have initial approval, we can move on to the next phase by submitting a full and formal credit application.
Fact Finding as Part of the Second Charge Mortgage Process
Our initial consultation includes completing an evaluation called fact-finding – this is a basic overview which helps us make tailored recommendations before we get further along in the second charge mortgage process.
Fact funding consultations help a broker create a key facts summary, which shows all of the details of the funding you wish to find, their suggestions and other relevant details necessary to run a first credit search as part of the pre-approval application.
This first part of the second charge mortgage process is not stored on your credit file but allows the lender to run through a quick analysis to see whether they are likely to be able to approve your loan. If they are satisfied, they will issue an agreement in principle, which you follow up with your formal application.
Application Processing During the Second Charge Mortgage Process
Underwriting is an important aspect of the second charge mortgage process, where the underwriter completes a more in-depth assessment of your income and outgoings, credit record and other information. This stage is where your bank statements, payslips, proof of ID and other information are needed to allow you to go ahead and apply for second charge mortgage lending.
From there, we liaise with the second charge lender to answer questions, clear up any queries or request further information where necessary.
Property Valuations When You Apply for Second Charge Mortgage Borrowing
Finally, the lender will ask for the property to be valued as part of the second charge mortgage process. This is normally mandatory because the lender must have an accurate and up-to-date valuation to verify your equity ownership, which acts as security.
Some lenders will request a valuation once they have provisionally approved your full application, and others will expect an independent valuation from the outset – we can provide more information about this part of the second charge mortgage process depending on the lender you select.
Once all of these steps are complete, the lender will produce a formal offer to lend, stating any fees and charges, along with the interest rate. Revolution Finance Brokers can negotiate where there is scope to reduce those costs before finalising the deal.
