Rocketing fees from mortgage lenders
The hefty fees that many mortgage lenders have charged have been under fire for some years, but is seems that the fees that were being charged a couple of years ago are nothing compared to the ones that are now being charged. A recent report has shown that mortgage arrangement fees have soared over the past couple of years, and at a time when finances are tighter than ever and credit conditions have become incredibly difficult, consumers are being charged through the nose by lenders through extortionate arrangement fees.
The situation has reached a point where the Chancellor of the Exchequer, Alistair Darling, has warned banks to stop ripping consumers off with these fees, and has entered into talks with the UK’s financial regulator, the Financial Services Authority, in order to determine what can be classed as a fair fee in terms of mortgage arrangement fees. However, many lenders have hiked up their fees by incredible amounts over the past year, with some charging double what they used to.
The figures show that in September of 2006 there were only around twenty mortgages that charged arrangement fees of £750 or more. However, there are now three hundred mortgages that charge fees in excess of this figure. The average arrangement fees has rocketed from £517 in 2006 to £860 today, and it seems that some lenders continue to increase their fees as they try to weather the effects of the global credit crunch.
One industry official stated: ‘Such high application fees will come as something of a shock to many homebuyers. We’re just not used to these levels. The days of fee-free mortgages are over and frankly getting anything under £1,000 is something of a coup. With stamp duty reaching an average of £4,950 per property, moving home is becoming more and more expensive.’
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