Homeowners looking to arrange a new
mortgage deal have been warned to watch out for prohibitively high fees on some
sub-prime mortgage products.
According to research from
financing website MoneyExpert, the average fee payable on a sub-prime mortgage has increased from £813 in July 2006 to £923 at the present moment, which represents a 13.5 per cent rise in six months.
Moreover, it has been revealed that the number of deals from
mortgage lenders that insist upon a fee in excess of £1,000 has increased by almost a half in the same period.
As a result, MoneyExpert's chief executive Sean Gardner has urged
homeowners who are looking for a specialist mortgage product in this sector to
compare mortgages from a range of mortgage
lenders before committing to a deal.
"Make sure you search the market high and low as there are thousands of products to choose from," he said.
"High arrangement fees can skew the effective rate of interest you'll get on your mortgage."
Sub-prime
mortgages typically prove popular among homeowners with a
poor credit history or those who have difficulty proving their income, such as
self-employed or part-time workers.
They typically involve less competitive
mortgage rates than standard mortgage products .
