Homeowners 'Face Unjust And Punitive Charges'
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Finance > Personal Finance
Feb 10, 2008
Steve_Smith
Homeowners 'Face Unjust And Punitive Charges'
Missing a mortgage payment could place homeowners under more financial pressure than they had originally anticipated, new research suggests. According to a study carried out by moneysupermarket, it was revealed that those who are unable to meet this monthly demand for payment may find that they face a fine. In its analysis of 18 leading mortgage lenders the price comparison website revealed that there is a great deal of inconsistency among the charges consumers receive for not making a repayment on their mortgage or having a cheque or direct debit payment returned. It was revealed that Woolwich and Standard Life implements fines of 40 pounds and 35 pounds respectively for those who miss a mortgage repayment. Meanwhile, GMAC charges 50 pounds per month for those who are in arrears of at least 12 weeks. And in receiving such a fine, consumers may not only develop problems in meeting mortgage costs but also other areas of financial demand, such as UK loans, credit cards, household bills and council tax. It was also stated that those who look for financial assistance from their money lender could come under even more monetary pressure as they will have to pay for debt counselling services. Such strains could be especially pronounced for those who are customers with Halifax and GMAC as the financial institutions both charge 100 pounds. Meanwhile, from March 3rd borrowers with the Yorkshire Building Society and Accord will incur costs of 99 pounds 88 pence. However, the Royal Bank of Scotland and HSBC are among those which do not implement fees. The price comparison site went on to state that those who are concerned about their money management should instead consult a free advisory service such as Citizens Advice. In getting such guidance, it is possible that consumers will not only be able to make mortgage payments with greater ease but also manage personal loans, credit cards and household bills more comfortably. Commenting on the data, Louise Cuming, head of mortgages for moneysupermarket, said: "Borrowers in the unfortunate situation of going into arrears can expect to face some punitive and unjust charges. Many lenders are quick to agree on a mortgage, but not so eager to help financially when their customer is most in need. Charging someone 372 pounds is equivalent to raising the annual standard variable rate on a 150,000 pounds mortgage from 7.5 per cent to 8.49 per cent." Ms Cuming added: "Lenders aren't charities, but no one wins if they automatically burden customers with more fees and debt. I'm sure customers in arrears are unaware that most lenders charge for every call they make and letter they send." She stated that the "biggest outrage" is that many providers either charge for financial advice or outsource such guidance, though it is available elsewhere for free. Upon getting monetary advice, those people looking to lessen pressure on their finances may wish to apply for a cheap consolidation loan. In taking out this type of loan consumers could find that they are able to merge numerous financial constraints, such as mortgages and credit cards, into a single low-cost monthly repayment. Speaking last month, Beccy Boden-Wilks, spokesperson for the National Debtline, reported that the Bank of England's decision to lower the base rate of interest to 5.5 per cent may help many homeowners to manage mortgage payments.
Steve Smith writes for 1 Stop Finance Shop. A one stop shop for all your bad credit loans, debt consolidation loans and personal loans.Visit Today
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