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Comparison site Moneysupermarket has expressed affordability fears as lenders start to refuse the option to add fees to 95% loan-to-value (LTV) mortgages.
Abbey recently announced that the total booking fee can no longer be added on to its 95% range, meaning borrowers must pay these additional costs upfront.
Louise Cuming, head of mortgages at Moneysupermarket, said: “I suspect the Abbey decision has been driven by decreasing house values.
“Adding fees onto a 95% mortgage effectively means the lender is exceeding 95% from the outset, something Abbey is clearly nervous about doing in the current climate.
“I fear this will be a growing trend leaving applicants for 95% products not only needing a 5% deposit, but savings to cover fees, Stamp Duty and solicitors costs as well. Financially, borrowers will be better off in the long run if they do not add fees onto the mortgage.
“However, for cash strapped first-time buyers having to find this amount upfront is yet another hurdle on the way to homeownership.”
Francis Ghiloni attempts to answer the age old question that is particularly pertinent for mortgage borrowers at the moment.
The July/August 2009 issue of Your Mortgage is on sale now. In it we look at the return of higher LTV mortgages, find out about the dilemmas facing first-time buyers, profile London’s largest brokerage and explain how to buy property in France. Get your copy for the latest news, information and help for those looking for a mortgage.
The Your Mortgage Awards aim to reward those lenders that have excelled in providing innovative and competitive products. Widely regarded as the UK's definitive consumer mortgage awards, the Your Mortgage Awards have now been running for 18 years.





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