28 March, 2008
Peter Toner, Independent Financial Adviser with Forbes Solicitors says. 'Traditionally around a third of borrowers either stick with their existing lender or move simply because of a word of mouth recommendation. Some borrowers face increases of up to a third in their mortgage payments. This is borne out by figures from the Citizens Advice which has recorded a 35% jump in enquiries concerning mortgage arrears in the first two months of 2008.
Consumers need to make full use of all the resources available to them. Firstly, they need to seek advice from their existing lender as to what deals they can offer. To simply move onto their variable rate would involve a massive monthly payment hike. Secondly they need to take Independent Financial Advice to ensure that this huge investment is managed intelligently.
Homeowners need to be aware of two common pitfalls. If arrangement fees are added to the loan then interest is payable on that figure throughout the loan period. Secondly they should be aware that by increasing the mortgage term greatly to reduce monthly costs the cost per pound borrowed would also increase'.