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Double Charge?

Can anyone explain what a "double charge" is over a property? It has been suggested to me that I get one of these, but not sure what it is, or where/if I can get one.

In brief, I need to borrow 65,000 to fund a professional training course. I only have 33,000 equity in my house (house value 130,000, mortgage outstanding 97,000).

Someone suggested I could take a double charge to cover the difference. I assume that is like a second mortgage?

The whole lot will be paid back in full within 7 years, but I would want repayments based on 25 years to keep the immediate costs down.

Any suggestions/ideas?

Ta, D.

Reply to
David Wright
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Doesn't seem to be a standard terminology. "Double charge" with respect to property is almost always referencing taxation, as in:

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On the other hand, second mortgages, trust deeds, charges on land, etc. often are in excess of the value of the security: the property is sometimes said to be "under water", with interesting results under the insolvency laws of various jurisdictions.

Reply to
Tam

I wonder whether you mean second charge. When you have a mortgage the lender takes a first charge over the property. If you then take out a secured loan (i.e. secured on the property) the lender of that loan takes out a second charge. He comes second to the main lender if there's a default requiring a realisation of the asset.

Rob Graham

Reply to
Robin Graham

You are quite right - a hiccup in the terminology on my part!

Is it possible to take out a secured loan in this way in the UK, where only a part of the loan can be secured on the property because of a lack of adequate equity to cover the whole asset?

Plenty of places will agree to loan me up to 95% of the equity, but I have not found anywhere that will lend on a second charge - at least, I don't think I have.

Do these exist, and where does one go to get one!?

Thanks, D.

Reply to
David Wright

A possible option is a lender like Northern Rock who lend up to 125% LTV - first charge only.

Reply to
Doug Ramage

Perhaps the more aggressive American lenders. They do lend like that in the USA. But often at nasty rates: many are sub-prime lenders.

Reply to
Tam

I would think that a 65,000 loan secured on 33,000 of equity should just about be possible as long as you can persuade the lender that you are legit. From experience I would think that it would be advisable to draw up a "business plan" of how it is all going to work out as with that size loan for that purpose I would imagine you could well end up being referred to a business banking team. You need to plan whether you need to draw down the whole amount immediately (which could look dodgy as if you might do a runner with it) or whether it is in stages (like once you have completed a demonstrative component you are able to draw down the funds for the next part).

My only other thought of what a "double charge" could be would be finding lenders who aren't to hot on registering the legal charges and fraudulently allow multiple lenders to think the are taking the second charge after the mortgage company over the same 33k but you could rather come unstuck there!!!

Just my thougths

Chris

Reply to
Chris

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