Free advice for mortgage borrowers

Permalink: Free advice for mortgage borrowers
by Kay Murchie

The Financial Services Authority (FSA) estimates that 1.4 million homeowners will see their fixed-rate mortgage deals expire this year. As a result, they are starting to look around to find a better deal from other lenders, as well as their existing one.

With this in mind, the Council of Mortgage Lenders (CML) and the Money Advice Trust (MAT) are creating a joint venture to offer free advice to mortgage borrowers.

However, with the ongoing credit squeeze, experts believe there is now a strong possibility that more banks and building societies will increase their interest rates or stop offering new mortgages which will make it unlikely that those re-mortgaging will be able to secure the same rates again.

Michael Coogan of the CML said borrowers need to plan ahead for higher monthly payments and look carefully at the options available to them.

Anyone who thinks they might have a problem in paying their mortgage should talk to their lender as soon as possible, he advised.

The earlier the borrower makes the lender aware of any potential payment problem, the wider the range of options for dealing with it, concluded Mr Coogan.

The problems in the mortgage market continues with internet bank, first direct, announcing that it has temporarily withdrawn all its mortgage products as it tries to clear a backlog of customer applications.

Alliance & Leicester and Scottish Widows have both curtailed their product ranges and Northern Rock recently set its new mortgage rates at uncompetitive levels, in a conscious effort to drive away new business.

Furthermore, the Co-operative Bank has withdrawn its two-year mortgage deals while Lehman Brothers, the US investment bank, is also withdrawing from the UK mortgage market.