Mortgages Uncovered

Don’t rush even if it is to catch falling interest cuts, tread carefully.

Homeowners were once able to reserve mortgage rates 6 months in advance from their next mortgage lender without parting with a penny. Should something better come along in the market, they were also given the chance to disregard their first mortgage offer and go with the better deal.

However, in the current financial climate lenders are protecting themselves warns head of mortgages, at Moneysupermarket.com, Louise Cuming;

“The percentage of borrowers who went back on a mortgage agreement used to be tiny. But in recent weeks, with the base rate tumbling, an unprecedented number have wanted to back out. Any valuation fees for the mortgage are sometimes payable upfront and booking fees can also be charged to reserve the rate,” says David Hollingworth at broker London & Country. “Cheltenham & Gloucester, for example, charges £99.”

Other lenders who will be asking for part payment upfront include Yorkshire Building Society who charge between £195 to £495 for what is referred to as a “product fee” upon your mortgage application.

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“Every lender’s policy is different but if you find a deal that’s slightly cheaper than the one you have booked in, it may not be worth switching again,” says Mr Hollingworth. “Either way, make sure you know exactly what the implications of changing your mind are.”