Second or Third Charge Bridging Loans

Second and third charge bridging loans can help you through difficult times however these are relatively much more expensive solutions than a first charge bridging loan.

In the case of second charge bridging loans, the lender is only second in line for being able to recuperate his loses. This certainly implies that you already have a mortgage existent (a first charge loan)
In the case of third charge bridging loans, the lender is the third in line of being eligible to recuperate his losses. For example, if you have an existent mortgage (a first charge loan), plus yet another outstanding debt secured with your property (a second charge loan), then only a third charge bridging loan can be obtained.

As seen, second and third charge types of loans involve a lot of risk for the lender. In case you default on one of these loans, the lender must wait until all other lenders are paid off, only after this can e redeem the loan. From the two options, it is always better if you can opt for a second charge bridge loan, because this involves a slightly smaller degree of risk for the lender, and you won’t jeopardize the safety of your property that much (less exposure to loss).

In case your only option is a third charge type of financing, then:

You must present a good to excellent credit rating. This means that you can make proof of the fact you have kept up with all the required payments on your outstanding debts. Otherwise, you are not eligible for this type of financing
Lenders who agree to offer you third charge loans, will most often want to convert it to a second charge type. This means, that you are made eligible, but only if you pay off in full your second charge loan. For example if you have a mortgage as a primary loan, but you also have an outstanding secured car loan, you must pay off your car loan, so that the third charge bridging loan automatically becomes a second charge type.
Any the case, you should carefully inspect the market before proceeding for any type of loans. Especially if you have too many outstanding secured debts, with each loan you collateralize, you are exposing yourself to imminent danger – that of having your home repossessed, and after all the charges are being paid off, you might end up without any benefits. It is advisable that you also consult an expert, who can tell if your present financial situation (income, debts, and expenses) would make such a loan affordable.