Are There Clauses Hiding Away Within Your Mortgage?
Property advisors have recently revealed that there is much more to your mortgage than affording your monthly repayments. In their study they discovered that many leading lenders are now hiding away within a property owners mortgage documents an array of new charges that they are completely unaware about.
As a result property advisors are strongly advising property owners to bear the following 6 points in mind when reviewing their mortgage:
Moving From Interest-Only To Repayment Terms (Vice Versa)
This service previously used to be free, however most lenders now charge administrative fees for this work. Lloyds TSB and Cheltenham & Gloucester for example charge £77; Abbey and Northern Rock £75, whilst others will ask for average administrative fees of £50-£75.
Changing The Length Of Your Mortgage Term
Whilst shortening your mortgage term can dramatically cut your total repayment costs; changing the length of your mortgage is no longer a free service. Most banks and building societies will now charge you £50+.
Needing Extra Paperwork
In the event that you need to access copies of your statements, Abbey National will charge you £25 to duplicate these documents and £35 to retrieve/copy them. Fortunately, some lenders do still offer a free service to property investors where you can access your account online and print off these documents for free.
Leasing Your Property Investment
The recent rise in accidental landlords over the last 2 years has prompted many lenders to introduce additional fees for turning your home into a property let, such as ‘consent to let’ fee and increased interest rates for property owners who plan to move out and lease their own home. The lowest tariff you’ll encounter is Skipton Building Society who charge a consent fee of £100 and interest rate increases of only 0.5%-1% (depending on the size of your existing mortgage).
Modifying Your Home Insurance
It may sound simpler to take out home insurance with your own mortgage provider, but this service is often 33% more expensive than those available on the open market. For instance if you were to buy a policy independently, many lenders will charge you £25. However, lenders such as Barclays, NatWest and Tesco will offer you a £25 bonus for becoming a new insurance customer.
Going Into Arrears
Many lenders are currently under investigation by the Financial Services about the fees they charge property owners who fall into arrears. However, until this issue is resolved these additional penalties will unfortunately continue to be charged:
- First letters about arrears £10 (C&G)
- Unpaid direct debits £30 (Northern Rock)
- Costs for instructing external debt Counsellors £100
- Penalties for borrowers in arrears £40 a month
In addition, many lenders will also add hundred of pounds to a property owner’s bill once repossession proceedings are initiated.
Related posts:
- Can Mix And Match Mortgage Help Property Owners?
- Property Owners Face Excessive Home Insurance Charges
- Northern Rock Bounces Back!
- Lenders Urged To Remain Vigilant Against Mortgage Fraud
- Should You Let An Estate Agent Find You A Loan?
Tags: property advisors, property investment, property investors, property landlord, property owners
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