If you’re a property owner looking to secure funding, you’ve likely come across terms like “property charges” and “redemption statements.” These concepts are crucial to understand, especially if you’re dealing with arrears or seeking a secured loan to clear debts tied to your property. At Posfin Capital, we specialize in helping borrowers navigate these complexities with our Sub Loans (funds in 3–5 days) and Main Loans (up to 70% LTV). Here’s a clear guide to understanding property charges and redemption statements.
What Are Property Charges?
A property charge is a legal claim on your property that secures a debt, such as a mortgage or a second loan. When you borrow money against your property, the lender places a charge on it, meaning they have the right to repossess the property if you fail to repay the debt. There are different types of charges:
- First Charge: Typically your primary mortgage.
- Second Charge: An additional loan secured against the property, often with a higher interest rate.
- Other Charges: May include unpaid taxes, leasehold service charges, or legal fees.
Understanding the charges on your property is essential when applying for secured funding, as they affect how much you can borrow and the lender’s risk.
What Is a Redemption Statement?
A redemption statement is a document provided by your lender that details the total amount you owe on a loan secured by a property charge. It includes:
- The outstanding balance of the loan.
- Any interest accrued.
- Early repayment fees (if applicable).
- Arrears or late payment charges.
When you’re looking to clear a charge (e.g., to stop repossession or refinance), you’ll need a redemption statement to know exactly how much you need to pay to settle the debt. At Posfin Capital, we can help you request redemption statements as part of our secured funding process, ensuring you have all the information you need.
How Property Charges and Redemption Statements Impact Secured Funding
If you’re applying for a Sub Loan or Main Loan, lenders will want to know about any existing charges on your property. These charges reduce the equity available for borrowing, as they must be paid off before or alongside the new loan. For example, if your property is worth 500k and you have a 200k first charge, a Sub Loan from Posfin Capital (up to 40–50% LTV) would be based on the remaining equity, potentially providing up to 50k. A redemption statement helps you and the lender understand the exact amount needed to clear those charges, ensuring a smooth funding process.
How Posfin Capital Can Help
At Posfin Capital, we make it easy to manage property charges and secure the funding you need. Our Sub Loans provide fast arrears funding for business purposes, with funds in 3–5 days to clear charges and stop repossession. Our Main Loans offer up to 70% LTV with 12 months of no repayments, ideal for refinancing or long-term debt management on your property. We’ll guide you through requesting redemption statements and understanding your charges, ensuring you get the best secured funding solution for your situation.
Ready to Clear Your Charges?
Don’t let property charges hold you back. Whether you’re facing arrears or looking to refinance, Posfin Capital can help with fast, reliable secured funding.
Apply now: bit.ly/POSFIN_PropertyAssessment.