Mortgages -
Homeowners Hit By Soaring Mortgage Fees - 15/04/2008
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A new study has revealed that homeowners are being slammed with increasing arrangement fees of about £5,000 to take out mortgage.
The research by mortgage advice company, Mform, said homeowners are forced to pay higher interest rates and soaring fees.
Arrangement fees, as the new fees are known, expose the kind of stress people seeking to take out loans for mortgage or even those remortgaging are made to go through.
Average fees have nearly doubled over the last 12 months. Whereas the average fee for the most competitive three-year fixed rate deals was £578 last year, it is now £1,132, showing a rise of 96 per cent
To take out a two-year fixed rate deal people are made to cough out a lot more, ranging between £999 and £1,478, averagely.
Although the HSBC recently introduced a deal for people from rival lenders whose fixed rate mortgage is ending, they are charged up to £5,000 to get the same rate for two years. This deal with HSBC is called ‘Rates Matcher’.
Mform’s business development director, Francis Ghiloni is urging people to be vigilant so that they are not fooled into accepting the lowest rate without checking the fee.
Meanwhile a call has been made on Prime Minister Gordon Brown to take urgent action to unblock the mortgage market after he held a meeting with leading banking chiefs, reports said.
Shadow Chancellor George Osborne said it was time for the government to stop being indecisive as the situation in the housing market worsened.
“We need to unfreeze the mortgage market with the collateral swap programme that I set out today,” he added.
In the meeting Mr Brown was told by the banks that more liquidity was needed in the banking system.
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