Secured Loan Case Study

Case 1

Second charge mortgage for debt consolidation

A good few of the homeowner loan enquiries that come through on Teito are for debt consolidation purposes. One case I handled springs to mind as especially memorable.

The client had accumulated a lot of debt from credit cards and loans to complete home improvements, and was struggling to keep on top of them. They were on high interest rates, which resulted in him missing payments and negatively impacting his credit file. 

He firstly applied to his current first charge mortgage lender for some additional borrowing to repay his debts and have one affordable monthly payment, but was declined due to comments that came back on the valuation report. 

I then looked at his options for a second charge mortgage. This was challenging as affordability was tight due to the client having two jobs, the second of which he had only been working for under 12 months. This meant that most lenders were unwilling to consider the income earned from it until he had held it down for at least a year.

After a lot of research, I found a lender that would accept 100% of the second job income which meant it would fit on affordability, and they were happy with the property type too. 

After just four weeks, the second charge was completed, the client had all his debt repaid directly from the lender, and had a low, affordable monthly payment over a short term. 

The client's name and personal information have been excluded from this case study to maintain their anonymity