It’s often said that home is where the heart is. But it now seems that expression could be modified to note that home is just about where everything making up our life is based.
While the last year has seen a boom in property sales, research conducted recently by Santander suggests that four in five (81%) current homeowners plan to make changes to their homes in the next 12 months. And for two in five people (40%), these plans have only been accelerated by the Covid-19 pandemic.
Looking at our own internal data, we are being presented with many different types of home improvement applications from a variety of customers. From simply wanting to upgrade their kitchens after a surge of banana bread experiments, to garage conversions for that much-needed office space, the home improvement business line is booming in the second charge sector to help families navigate their own growing pains.
For so many of these homeowners looking to fund projects, a second charge mortgage offers a consolidated solution to cash flow and has proven to be a vital tool in a broker’s armoury.
The advantages of second charge mortgages in the changing landscape
Historically, second charge mortgages were known as last-resort products for clients with more complex credit concerns. However, contrary to this misconception (Covered previously in this series by our Wholesale Director, Craig Collins), our customers have a higher average credit score than the typical first charge mortgage customer.
Given how much more time we’ve all spent at home over the past year, it makes sense that people want to develop their own four walls to build a home that fully caters to their needs. This flexibility is more important now than ever as many are faced with the task of creating a new post-pandemic financial and working plan, which has presented us all with new challenges.
By adapting to the changing needs of customers, we’re able to cater to wide-ranging needs.
However, it’s crucial that brokers understand the customer’s circumstances to guarantee they are providing holistic advice.
They need to ascertain the true cost of the home improvements to ensure that customers have adequate funds to cover the works and realise the true potential in their properties.
How customers can benefit from this type of homeowner loan
Second charge mortgages assist customers flexibly without affecting their customer’s existing mortgage loan. This type of homeowner loan can help customers realise the potential in their homes and consolidate any home improvement projects into one monthly repayment.
We’ve also commenced accepting referrals for customers who work in industries previously affected by the pandemic, including hospitality and retail.
We’ll continue to support our wider second charge broker community with this new near-prime product offer, working closely with brokers to ensure all types of homeowners can achieve their home improvement ambitions.
To chat more about second charge mortgages and how Pepper Money can help, contact Tom on LinkedIn.