3rd Charge??

shell7t8

Hi,

Just a quickie - my partner and i have a mortgage of £90,000 and a secured loan of £15,000. The property is valued at £130,000 and we were thinking of taking a loan of about £3000 to clear off some of our smaller, high interest commitments but as we both have a poor credit rating the lender has said we could only do secured.

Can they put a 3rd charge on the property?

Thanx
Shell

roswell

Maybe a trip to the DFW board will be more usefull to see if you cna change your spending habits as i would guess the first loan was to clear other debts ?? its very likely they can find ways to reduce your outgoings so you dont need this £3000 secured over a long term.

homer_j_3

it will need the consent of both 1st and 2nd charge, not many people do allow this to be honest. Have you considered restructuring all your loans etc to keep to 2 charges if this is your only option?

jamesd

Will your mortage lender allow a repayment holiday? Then you can use those mortgage payments against the debt.

Noz

i know some lenders will not allows a repayment holiday if a second charge is already in place on the property

silvercar

In theory you can have any number of charges on a property.

The reason higher charges have to give permission is that, should you need to sell up, all charge holders need to agree. So if you had a property valued at £200k with an initial mortgage of £120k and a second charge of £40k on paper you might say why would they not agree to a third charge of £3k?

Say you then get into financial difficulties and the arrears on your original mortgage mean you now owe £145k, the second charge is also getting out of hand and has risen to £55k. The sale could only go ahead if all charges could be repaid. So the third charge is effectively stopping the sale going ahead, leaving the mortgage company unable to secure repayment of its charge.

regularsaver1

yeah lender i work for will not allow payment holiday if a second charge is present

OP can you go to your mortgage lender to consolidate 2nd charge and this loan so you only have one charge?