Blue Q Mortgage

Most of us know that a mortgage is simply a secured loan, usually secured on a property such as a house or flat. If you fail to keep payments or don’t keep to the terms of the mortgage you may incur penalties, the most severe of which might result in the mortgagee (the lender) applying to the courts for a possession order. 

Your mortgagee will have the first claim on the property in such circumstances and they will hold a charge on the property, registered on the deeds or, in most cases these days, on the registered title kept at the Land Registry. This will prevent the property being sold without any mortgage first being paid off.

A second mortgage, as the name suggests, is a second loan that is also secured on a property. However, being the second loan, it is normal that the rights enjoyed by the second mortgagee (lender) are subject to the prioritised rights of the first lender. For this reason, second mortgages will usually be more expensive to the borrower in terms of interest rate, although there are other benefits over other funding options such as a remortgage.

For example, if your first mortgage is subject to a significant early redemption fee, it might be cheaper to take a second mortgage, perhaps for a shorter period of time, rather than incur the redemption charges on the first mortgage. Other borrowers apply for 2nd charges when their existing lender cannot offer any further borrowing, for whatever reason.

Any second mortgage will still need to meet the usual tests in relation to affordability, advice and loan to value/equity. In any event, the borrower should check first with the original lender to make sure that they will allow a second charge to be taken on the property. It’s therefore, important to know the terms of the first loan.

It might be worth taking advice on a second mortgage if you’re struggling to get some form of unsecured borrowing, such as a personal loan or because you’re self-employed. Also, if your credit rating has gone down since taking out your first mortgage, remortgaging could mean you end up paying more interest on your entire mortgage. Here, a second mortgage might be a better option.

Second mortgages are regularly used to fund home extensions and home improvements. New kitchens being a favourite! Contact Blue Q about the best course of action for you.

With energy prices likely to rise in the long term, it makes sense to consider how you can make your home more efficient. Especially as, under the Government Green Homes Grant scheme, hundreds of thousands of people will be able to access vouchers of up to £5,000 and in some cases £10,000.

The grants, provided in the form of vouchers, can be used to make your home more efficient, thus saving you money in heating and electricity bills.

The Government grant scheme will cover at least two thirds of the cost that homeowners spend on energy efficiency green upgrades, while those on the lowest incomes will not have to pay anything.

So what sort of improvements are worth considering?

INSULATION – A significant proportion of the heat generated to heat your home is lost through drafts and poor insulation. In older properties with solid wall construction, internal dry-lining can help improve insulation in the winter months. Older homes often don’t have under floor insulation either. But the primary and most effective way to stem heat loss and bring down your heating bills is via additional roof space insulation.

DRAUGHT PROOFING – It seems silly, but the addition of some inexpensive draft exclusion strips to doors can make a difference at a relatively small cost.

NEW WINDOWS & DOORS – Single glazing is a great way to lose heat generated in your home! In the winter months, single glazed homes suffer from condensation and dampness, especially in kitchens, bathrooms and laundries where steam and warm air meets cold panes of glass. Replacing windows and doors with double or triple-glazed units can be a very effective way of reducing your heating bills.

NEW BOILERS – Modern boilers are considerably more efficient than older models and it makes sense that if you need to burn less fuel for the same output, you will be doing your bit for the environment. Improving hot water tank insulation, installing smart heating controls and thermostats and thermostatic radiator valves can help you heat different parts of your home only as much as you need. After all, why keep a spare room as warm and toasty as you might your child’s room?

LOW CARBON HEAT SOURCES – Sustainable heat sources such as solar and air and ground pump heat sources are becoming more popular and whilst these options can sometimes be expensive to install, they can save you a lot of money in the longer term.

To qualify for the grant funding, households will need to install at least one ‘primary measure’ Primary measures are defined as; Solid wall, cavity wall, under-floor, loft, flat roof, room in roof, park home or a an air source heat pump, ground source heat pump or solar thermal system.

So long as there is at least one primary measure in the package of works, households will also be able to install secondary measures. Secondary measures can only be subsidised up to the amount of subsidy provided for primary measures. (e.g. if a household receives £1,000 for primary measures, they can only receive a maximum of £1,000 towards secondary measures).

The secondary measures are:

• Draught proofing
• Windows and doors: Double/triple glazing (where replacing single glazing), secondary glazing (in addition to single glazing), upgrading to energy efficient doors (where replacing doors installed prior to 2002).
• Heating controls and insulation: appliance thermostats, hot water tank thermostats, hot water tank insulation, smart heating controls, zone controls, delayed start thermostat, thermostatic radiator valves
  For low-carbon heating to be installed, households will need to have adequate insulation (e.g. wall and loft, where applicable). These can be installed as part of a package – they do not have to already be in situ.

Adding insulation and making your home more energy efficient will add value, as well as reducing your monthly energy bills. When getting your home improved, retain all paperwork as this will be useful when getting your home valued and surveyed, and will mean your EPC is updated too.