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Tips to prevent UK mortgage cons

Date: Tue, 01 Nov 2005

Consumers are been advised to make sure their UK mortgage provider is not taking advantage.

Nationwide has highlighted a number of tips that will prevent house buyers making mistakes when choosing their mortgage. The advice includes encouraging buyers to shop around before committing to a deal, avoid higher lending charges and early redemption penalties.

"Don’t be fooled by an initial low interest rate that has extended redemption penalties. Rarely, if ever, does the benefit received from the low initial rate outweigh the burden of the higher rate at the end of the period, so be careful," warns Stuart Bernau, executive director at Nationwide.

Even though tougher regulations were introduced to the mortgage market in 2004, many consumers are still being misled by their mortgage company. Nationwide claims that even the requirement of Key Fact Illustrations, which are designed to increase transparency of financial products, has failed to stop providers passing on hidden costs.

These hidden charges can include fees for altering the mortgage term, obtaining a duplicate mortgage statement or for deeds storage, so consumers are urged to make sure they check all the small print before signing on the dotted line.


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