A second charge arises when an existing borrower uses the same security for a loan from a different institution .
Second mortgages are therefore a way of raising additional finance.
They are offered by many banks and finance houses but few building societies. A building society may offer a second mortgage if it already holds the first. The institution offering the second mortgage will seek information from the first charge holder. This is usually done through a questionnaire. The borrower must give consent for the release of information.