Consumers are being urged to be aware when it comes to arranging their mortgages. A growing trend amongst
mortgage lenders is to charge the borrower an arrangement fee.
The trend will require borrowers to enter deals with their eyes open.
Consumers must know how much a potential fee will be before they commit to a deal. The fees range in size, but some are calculated as a percentage of the
mortgage advance.
Mortgage analysts have indicated that the trend is growing as
lending margins are tightening up. Consumers, aware of the lending market due to a better flow of information and an increasingly competitive market place, are likely to switch between
lenders to seek out the best deal. The fees are perceived by some analysts as a way for lenders to ensure money is made on their part. Analysts also indicated that fees should actually be less now for lenders, due to better technology, online capability, and an easier process.
Analysts warned to be aware of key factors about
arrangement fees Firstly: lenders may charge a fee even if a
mortgage application is not successful. Fees are also open to interest charges. All of these factors shouldn’t put the consumer off, they should just be aware of what they are dealing with.
