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Secured loans can be an answer for rip-off mortgage fees - 10/7/07 Many desperate homeowners looking to remortgage as interest rates continue to rise are facing severe settlement penalties from their mortgage company and it is often wiser to leave your existing mortgage in place and arrange a second mortgage, also known as a ‘secured loan’. The secured loan market in the UK is growing rapidly as the public become more disheartened with mortgage lenders charging rip-off fees. All regulated secured loans (loans arranged up to £25,000) have a maximum settlement penalty of 2 months interest charged on the outstanding balance at the time of settlement. Lenders cannot legally charge more than this amount and in April 2008 all secured loans in the UK will fall under the regulation of The Consumer Credit Act and all will be classed as ‘regulated’. As well as punitive settlement fees many mortgage lenders are now charging exorbitant arrangement fees, valuation fees, booking fees on fixed rates and are increasing switching fees. The Daily Mail reported today that ‘homeowners desperate to remortgage were yesterday warned to watch out for rip-off exit fees’ |
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The overall cost for comparison is 10.8% APR variable. The actual rate will depend upon your circumstances. Ask for a personalised illustration. Our rates start from 7.9% APR variable. We also have a range of plans with rates up to 17.5% APR allowing us to help customers even with the most severe credit problems. If you are thinking of consolidating existing borrowing you should be aware that you will be extending the terms of the debt and increasing the total amount you repay. A fee of between 0% and 10% of the loan may be charged depending on credit history and ability to prove income. The amount of fee will depend on your circumstances, however, we estimate that it will be 5% of the loan amount.