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Don't be fooled by the hype with self-certification mortgages

Date: Tue, 08 Nov 2005

Self-certification mortgages could be the answer for many wanting to move up the property ladder, but homeowners are being urged to make sure they can afford the repayment and arrangement costs.

Bradford & Bingley is encouraging lenders to double-check the small print on their policies and adequately budget for any potential fees such as legal costs or even valuation charges.

The growing competition in the UK mortgage lending market means that some providers are keen to win new customers with the promise of "headline grabbing" low rates. However, many borrowers could be fooled into thinking a low rate means having to pay back less in the long term.

"Lowering monthly repayments is easy to achieve and is futile unless it ultimately saves the borrower money over the term of the deal," said Duncan Pownall, mortgage development manager for Bradford & Bingley.

He added: "There could be a number of instances where a borrower actually ends up paying more because of the amount of fees they have to pay."

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