Second-chance mortgages 'offer hope to buyers'

Date:Friday 17th December 2010
Author: Max Freedman

Second-chance mortgage rates can be higher for borrowers, it has been claimed.

Catherine Hearnden, director at MyMortgageDirect, said individuals who have been knocked back for an initial mortgage loan can get good deals from second-chance lenders, but rates will often be higher.

She commented: "They are not rated as important because they are second charge and they are taken out because the people were unable to get a first charge [mortgage], so they probably would have a greater stretch on their income."

Ms Hearnden added that the present record low base rate means that mortgages are now taking up less of Brits' monthly finances on average.

Meanwhile, figures from the Financial Services Authority recently revealed that the number of new cases of arrears fell in each of the last seven quarters and was down to 36,600 in the third quarter of 2010 - down two per cent over the three-month period.