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John Charcol: Beware hidden mortgage fees

05 July 2006
John Charcol has warned that costs hidden in the small print of mortgage applications could hit you in the back pocket when you least expect it.

The UK mortgage broker has warned borrowers that things like early repayment charges (ERCs); higher lending charges (HLCs); or exit fees for switching your provider could all seem like only little extra but might be important at a later date.

Drew Wotherspoon of John Charcol said: "Buyers tend to get caught up in the excitement of choosing a new home and run the risk of paying the price financially by not ensuring they get the best value from their mortgage.

"If you're willing to bargain over fixtures and fittings it also makes sense to look at the other ways you can get a better deal when you move," he continued.

"As a mortgage will be, in the vast majority of cases, the most expensive commitment, borrowers should start here."

Mr Wotherspoon said that first-time buyers should no longer expect to pay HLCs, as more competition in the market means lenders are starting to scrap them as a standard feature.

He also warned consumers to be aware of what look like relatively minor fees such as £300 exit fees or ERCs.

A relatively small charge when borrowing a six-figure sum may not seem important but could cause problems when home owners wish to pay off their debt early or switch to a different provider.

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