Further advance when already have second charge

jkdt0077

Hello

I'm hoping some experts here could shed some light on this situation for me. I have a mortgage with Halifax and as we didnt have the deposit at the time the house builders, George Wimpey, paid our 25% deposit. This was secured as a 2nd charge on the property.

I've been looking into taking a further advance secured loan on the property and understand that the usual way they do this is by having it as the 2nd charge on the property. I was wondering if this means we wouldnt be eligible to apply for a further advance as the equity in the home is already set aside to Wimpey?

Does anyone have any knowledge of this area?

Thanks for your help,
Dan

Trying_to_be_good

The point of securing the debt is that there is equity in the property to repossess and sell if you don't pay up - I can't see anyone accepting being the third charge on a property if there's no additional equity.

If you want to borrow money to pay off debt, you may be best heading over to the Debt-Free Wannabee board to find ways of cutting your outgoings, and why you're running up debts (if you don't already know).

Sorry to not have better news.

jkdt0077

Thanks trying to be good.

That's what I thought pretty much, was just hoping I was wrong :sad:

opinions4u

jkdt0077 wrote: »

Hello

I'm hoping some experts here could shed some light on this situation for me. I have a mortgage with Halifax and as we didnt have the deposit at the time the house builders, George Wimpey, paid our 25% deposit. This was secured as a 2nd charge on the property.

I've been looking into taking a further advance secured loan on the property and understand that the usual way they do this is by having it as the 2nd charge on the property. I was wondering if this means we wouldnt be eligible to apply for a further advance as the equity in the home is already set aside to Wimpey?

Does anyone have any knowledge of this area?

Thanks for your help,
Dan

The lender you approach can request a letter of postponement from Wimpey, effectively prioritising the debt over Wimpy's interest.

Wimpy can, and probably will, decline the request.

What would it take to buy out Wimpey's interest?

jkdt0077

opinions4u:

They paid the 25% which was approximately £46000. I'm guessing the only way they would be happy is if we could repay that?

maninthestreet

So what was the purchase price of property, when did you buy it, and exactly how much money is secured against this property, and to whom is that money owed?

jkdt0077

maninthestreet wrote: »

So what was the purchase price of property, when did you buy it, and exactly how much money is secured against this property, and to whom is that money owed?

We only purchased the house in December 08, so it's been 9 months. The purchase price was 175000. The mortgage we took from Halifax was 75% (131250) and Wimpey paid 25% (43750).

The only reason I'm asking about this is because I logged into halifax online banking and on there it states that there is equity available on the house. I gues this is more just a general message though that doesn't take into account the individual circumstances of each mortgage?

maninthestreet

At the very best, you have 0% equity in the property, but you are probably in negative equity at the moment. There is no way any lender will lend you any more money secured against your property.