MoneyExpert Reports On Shock High Mortgage Fees Can Cause
Although having a fixed-rate mortgage deal may provide homeowners with a sense of financial certainty they should still be conscious of the pressures which their finances can come under.
In research carried out by MoneyExpert, it was revealed that the fees attached to such a borrowing product have become increasingly expensive over recent months. At present, the average application fee for a fixed-rate deal stands at 860 pounds and 25 pence, a rise from the 517 pounds and 19 pence which was recorded in September 2006. In addition, it was reported that there are 323 products which charge an application fee of at least 750 pounds, up from 22 noted 18 months ago.
Overall, it was revealed that there are a total of 939 fixed-rate mortgage deals currently available from 77 different suppliers.
Meanwhile, the price comparison site indicated that Halifax had the most expensive mortgage fee 18 months ago, with costs of 1,499 pounds on a two-year fixed mortgage for homeowners with at least a 25 per cent deposit. Now the highest fee has risen by more than 2,000 pounds from this figure. Currently standing at 3,999 pounds, such a charge is implemented by the same bank for existing consumers taking out a three-year fixed-rate deal on a home worth between 500,000 and two million pounds.
However, by obtaining such a fixed-rate deal it is possible that homeowners will know the exact amount of money they will have to pay towards their mortgage each month. In turn this may allow them to meet other areas of monetary demand such as personal loan repayments, credit and store cards, utility bills and transport costs more easily.
Commenting on the figures, Sean Gardner, director of MoneyExpert, said: “Such high mortgage application fees will come as something of a shock to many homebuyers. We’re just not used to these levels of charge. Anyone looking to remortgage or to buy a property for the first time will need to recalculate their options if they haven’t factored in fees. The days of fee-free mortgages are over and frankly getting anything under 1,000 pounds is something of a coup. And with stamp duty reaching an average of 4,950 pounds per property moving home is becoming more and more expensive.”
He went on to assert that as loan lenders are concerned about “risky borrowers” they are increasingly set to implement costly fees and high rates of interest into their borrowing products. Furthermore, it was suggested that homeowners may find that they have “very little maneuverability” when they wish to renegotiate their mortgage deal.
Consumers who have concerns about their capacity to meet varying financial commitments - whether it is paying previous loans, utility bills or otherwise - may find that applying for a low cost loan is a recommended move. In getting a loan it is possible borrowers will be able to fulfil demands on their spending quickly, leaving them with an affordable rate of repayment to make each month. This could also be of assistance to people wishing to manage mortgage repayments. Speaking recently, Experian reported that those who are looking to remortgage their property may find their monthly costs rise as the availability of low-cost fixed-rate deals diminishes.
Essentially Home Loans providing you with breaking finance news.