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Mias Calls On Mortgage Lenders To Fix Their Exit Fees

MIAS, the Mortgage and Insurance Advisory Services (http:www.mias-ltd.co.uk ), is concerned that, despite the recent publicity and various campaigns in the press, borrowers are still being stung by punitive exit fees.

Lenders charge exit fees when customers redeem their mortgage in full, for example, by switching their mortgage to a rival lender. Exit fees can also be termed administration charges, sealing fees or deeds-release fees and are raised to cover the cost of taking property deeds out of storage, sending them to a solicitor and producing a final account statement. Borrowers are warned when they sign up that if they switch lenders, theyll have to pay a fee but the size of that fee is not guaranteed to stay the same.

Within the last few years, lenders have increased their exit penalties steeply, with some now topping the 300 mark (http:www.mias-ltd.co.uknews-index.htm ). Firms have claimed that these hikes are necessary because of their increased costs and extra work, yet this justification appears hollow when one considers that property deeds are now held electronically at the Land Registry.

Alistair Good, Managing Director of MIAS said: One client, whose penalty had increased from 85 to 195 compared it with entering a car park where the prices were clearly displayed, only to find that they had more than doubled when it was time to pay.

He added: While we appreciate that lenders need to recoup the costs incurred when a mortgage is redeemed, borrowers need to be informed about these costs at the outset. If the fee is excessive, then the client can look elsewhere.

Although exit fees make up a tiny percentage of overall mortgage costs, it is unfair to hit a customer with an unexpected charge, which can reach 300. MIAS would like to see lenders state their exit fees clearly and fix them at the outset of deals. In this way, the client is treated fairly, in line with FSA guidelines.

One example is Northern Rock. Although they charge the relatively high fee of 250, they do commit to charge the fee stated when the client signs up for the mortgage. MIAS would like to see more lenders adopt this approach.
Commenting, Roger Milbourn, Director of MIAS, said: Exit fees, though unpopular with customers, are here to stay. But if lenders are to lose the tag of back door charging and reduce the flow of complaints to the Financial Ombudsman Service, they must be more transparent about these fees.

We see no good reason why the exit fee cannot be fixed for the life of a mortgage, so that the client would be aware of the charge from the start. Under the current system, exit fees can increase by more than 350% by the time the client comes to redeem his or her mortgage. This makes a mockery of the FSAs requirement to treat customers fairly despite their claims that they are not a pricing regulator.

In the absence of fixed exit fees, it is imperative for mortgage brokers to go through closing charges carefully with the client. The adviser should explain that the borrower may incur a punitive charge if they switch lenders or pay off their mortgage early (http:www.mias-ltd.co.ukfaqs.htm ) and in this way, broker and client can compare products fairly.

For further information, please contact:

MIAS Ltd
0845 833 0878
Managing Director: Alistair Good
alistair@mias-ltd.co.uk

Director: Roger Milbourn
roger@mias-ltd.co.uk

Notes to Editor:

The Mortgage and Insurance Advisory Service (MIAS Ltd) is a firm of impartial mortgage advisers, offering a comprehensive service to clients seeking residential and commercial mortgages and mortgage protection.

Founded in 2002, MIAS has quickly gained a reputation for providing straightforward, impartial mortgage advice, matching clients up with some of the most competitive deals around. MIASs experienced brokers have expertise in all sectors of the mortgage market and look after the whole transaction from beginning to end, making the process as smooth and as headache-free as possible.

In the business of mortgages and loans, it is best that you have all the tools you need in order to help you make a better informed decision. Mortgage calculators help consumers compute interest rates and monthly payments of mortgages being offered.

Arriving at the best decision usually means using the best mortgage calculators. Below is a short list of sites that offer the best mortgage calculators that the Web can offer.

Mortgage-Payment-Calculators.com – This site offers one of the best mortgage calculators in the Web. What’s more, their best mortgage calculators are offered for free to help you compute Amortization Tables, Monthly Payments, Loan Comparisons, Home Affordability, Early Pay Offs, Refinances, and to PreQuality a mortgage. With this best mortgage calculator website, you can also have access to online help on your mortgages from experts. Get the best ideas and get the best options with this best mortgage calculator website.

Interest.com Best Mortgage Calculators – This best mortgage calculator online site answers several questions that borrowers frequently ask – What will be my Monthly Payment? How much do I have to make to afford the loan on a particular home? How much can I afford to borrow? When you want to know how much your home loan will save you in taxes, this is the best mortgage calculator you can use. Other options featured in this best mortgage calculator website are an APR (Annual Percentage Rate) calculator, a Budget Calculator, and several Deposit Calculators.

Mortgage-Calc.com – This site offers you one of the best mortgage calculators in the Web. Their best mortgage calculators can give you quick and easy access to important calculations and information to help you with your mortgage needs. From how much you can afford and how much you can borrow, this best mortgage calculator website answers all your questions on mortgages and loans.

Bankrate.com Best Mortgage Calculators – If you want to know what your monthly mortgage payments would be, then Bankrate.com has the best mortgage calculators to help you with that. The best mortgage calculators of this site include amortization schedules, payment calculations, and more.

HSH.com Best Mortgage Calculators and Financial Calculators – This best mortgage calculator website offers you with a number of ways to estimate your credit limit for mortgages and other loan types. Play the “what-if” scenarios with the HSH best mortgage calculator.

As an added bonus, this best mortgage calculator site lets you download for free the powerful APR calculator from Wheatworks Software. Perhaps the best mortgage calculator offering this site has is its unique Income Qualification Calculator which helps you discover how much income you need to afford a certain monthly payment.

Homefair.com – This site’s Mortgage Qualifier is perhaps one of the best mortgage calculators there is. This best mortgage calculator is used to find out the maximum amount of loan you can qualify for. The results give out by this best mortgage calculator are based on standard lender rules.

Jeacle.ie – Or Karl Jeacle’s Best Mortgage Calculator. This best mortgage calculator website lets you enter your loan data into designated fields on their online forms uploaded into their site. The best mortgage calculator allows you to compute the principal amount, the interest rate, the years, annual insurance, annual tax, and annual inflation. Aside form this, this best mortgage calculator contains such data as Monthly prepayment, annual prepayment, and one-time prepayment.

Maybe you’re buying your first home or maybe you’re just considering upgrade residences.  Either way, you’re going to need a mortgage to pay for your new home.  Should you apply at the bank for a loan or should you take advantage of a mortgage broker’s services?  The decision really depends on a variety of factors, but most important is your personal preference and needs.

How do mortgage brokers differ from loan officers?  As an employee of a bank or lending company, a bank loan officer processes loans and mortgages for his or her employer.  The main difference between loan officers and mortgage brokers is that mortgage brokers are not employees of a particular lending company; they are independent or freelance agents.  Mortgage brokers can work with just a few or even hundreds of lending companies whereas a bank loan officer is an employee of one particular bank.  Though a bank officer may be able to offer a few different types of mortgages, they all originate from just one place whereas a mortgage broker works with tens or even hundreds of companies to get you a good interest rate and terms for your mortgage. It is a mortgage broker’s job to bring together borrowers and lenders – for a fee, of course.  A mortgage broker is essentially a go-between.  They do not lend you the money; they find the people who will lend you money for your new home.

Mortgage brokers do a lot more of the research for you.  They evaluate you as a homebuyer, and taking into account your credit standing, they decide which lender will best suit your needs.  A mortgage broker submits the loan application on your behalf and works with you until it goes through.  You can do this research yourself if you have time, but a mortgage broker has a working relationship already established with many of these lending companies and that may result in a better deal for you.  Mortgage brokers secure loads through many types of investors including investment banks, savings and loans and even private sources.

Most of the mortgages you may have seen on the Internet are put there by mortgage brokers.  Many in-person or online mortgage brokers have connections to lenders in all different parts of the country, which is something that has its own pros and cons.  You may end up getting a better rate, but an out of Area Company may not have the necessary knowledge of property in your area or specific property features and classifications.  In the longer run, this probably won’t be an issue; there just might be a slight delay in processing your application until all terms and questions about the property are answered.

If you’re having trouble securing a loan from a bank, a mortgage broker may be your best bet.  Mortgage brokers are often able to find a lender for applications that banks refuse.  So there is hope if your local bank has turned you down – you just need to expand your search for a lender to online banks or a mortgage broker.

To prepare for a meeting with a mortgage broker, you should obtain copies of your credit history.  Though a mortgage broker is able to do this, it will save time and hassle if you bring these with you to the initial meeting.  The mortgage broker will be able to give you a much clearer idea of the type of loan and terms he or she can secure for you if they know what your current credit situation is.

You do need to remember that mortgage brokers get paid a fee for the transaction so they are working for their own interests as well as yours.  The higher a rate they get for the lending company, the more their commission will be so let them tell you what terms they can obtain rather than what you’re willing to accept.

Remember that everyone’s needs are different.  Talk to family and friends and see whether they secured their mortgage through the bank or through a mortgage broker.  Do some investigating to find the best loan terms and transaction time.  Your real estate agent may also be able to make some useful suggestions or even refer you to a suitable mortgage broker.

The most important factor that determines whether a person is can procure a loan for himself or not is the fact, whether is past credit history is stable enough or not. All factors depend on his past record of handling credits. A bad credit history implies that his appeal for a loan would be rejected and won’t be met in most of the places. And the worst part is that, if the concerned individual in his past has ever been declared as bankrupt or had a foreclosure, then for sure the borrower would face difficulties when he tries to get a financing for a home mortgage purchase, home equity or second mortgage loan. But the gab that home loans are not available for people with bad credit history is just a baseless myth. Since these loans are available to people with bad credit history too. The way however to find such a kind of loan, however is to be to be persistent in looking out for such kind of loans, because there are home mortgage loans for people with bad credit.

The basic problems involving, the process of procuring loan arises from the activities of sub-prime lenders. These are those lenders who actually work really hard for fetching loans for the people with bad credit background and low credit score and then the charge absolutely unreasonable price for the job. Borrowers should be careful of borrowing money from sub-prime lenders, as they can charge high interest rates which, comparatively are too high than the market rate. Not only this, but these lenders also charge unreasonable pre-payment penalties. Online articles are posted in websites to inform the borrowers about their existence and caution them.
However, it’s not absolutely impossible to find lenders who give out loans at reasonable rates and agreeable charges, to people who have a bad credit history. All a borrower needs to do is look around and talk to different mortgage brokers, which would prove to be helpful to find a lender, that can get them an approved loan with a reasonable interest rate and fair terms of repayment.

Things that the borrower, should make sure about, are that he makes use of the lowest interest rate and terms possible. Specially a borrower with a bad credit history and bad credit score should make sure that he sends application for loans to a number of different lenders, since it would be sensible for him to make comparison between different mortgage loan quotes, so that he makes sure that he chooses the best one.

Finding mortgage loan offers in the UK is not difficult. From newspaper advertisements to surfing the Internet, mortgage loans sporting low interest rates and additional benefits to entice borrowers to sign up are literally everywhere. But, when a mortgage offer claims that it can save ‘x’ amount over the competition, how can you be sure just how much it will save you when applied to your own mortgage loan? Moreover, if the deal offered is short-term, how much will the offer’s standard mortgage rates compare with the mortgage rates you are currently paying for your loan? The answer to these conundrums is to compare the mortgage offers against each other, and to do this we need a loan calculator mortgage calculator.

Making comparisons with a loan calculator mortgage calculator

A loan calculator mortgage calculator is a clever little web program that is freely available on many loan and mortgage related websites. The principal behind a loan calculator mortgage calculator is quite simple – input the amount of the mortgage loan into the calculator along with the interest rate applied to the loan and the loan duration, hit the ’submit’ button and ‘hey presto’ you have a schedule of monthly loan repayments. So, for two or more mortgage offers you can enter the loan parameters into the calculator along with your mortgage balance and get an idea of what a particular mortgage offer will cost you each month, as well as what it will cost you in total over the lifetime of the loan.

To accurately compare your loan calculator results for different mortgage offers it is a good idea to print off each set of loan calculations from the calculator and make a side-by-side analysis of them. If the calculator you are using cannot handle multiple interest rates across the life of the loan then you may need to do several calculations to arrive at the final loan cost before making your side-by-side comparison. As an example, if you were to spend say 4 years on a fixed interest rate of 4.5%, and then change to a standard rate of 6.75% you will need to make two calculations – one at 4.5% to work out repayments across the first 4 years, and then a second calculation at 6.75% for the remainder of the mortgage term.

Aside from mortgage loan comparisons a loan calculator mortgage calculator can be used to work out how much of a mortgage loan you can afford in the first place. To do this simply choose a calculator that allows you to ‘reverse’ the calculation process by entering the repayment amount that you want to pay  can afford to pay each month and the interest rate. The calculator will take the loan input information and from it extrapolate the total mortgage loan you can apply for. Do bear in mind though that mortgage companies are rarely willing to lend more than 3.5 times your salary on a 75% mortgage or any loan greater than 75%.