Mortgage arrears charges vary between lenders, says National Homebuyers

Mortgage lenders are hitting borrowers with vastly different charges for falling into arrears.

[UKPRwire, Thu Sep 27 2007] Although all homeowners are aware that they face repossession if they fail to keep up with mortgage payments, it is more difficult to predict how large a fine they will receive.

A study by moneysupermarket has revealed that lenders such as Northern and Accord will allow a borrower to fall behind by one month without punishment, while others, such as GMAC, will slap on a £50 fine.

With rising interest rates seriously affecting homeowners' ability to keep up with payments, mortgage arrears charges are becoming ever more common.

"While I would not condone missing a mortgage repayment often financial hardship is caused by circumstances outside the control of the borrower, such as a relationship split," said moneysupermarket's Louise Cuming.

"It is fair to say those in the unfortunate situation of going into arrears can expect to face some highly punitive and unjust charges.

"We must question if these lenders are 'treating customers fairly' given the inconsistency of the penalty fees charged," she continued.

Homeowners struggling to keep up with mortgage payments may want to consider a quick property sale.

Julian King, director of the UK's leading fast property purchase firm National Homebuyers says, "We are seeing an unhealthy increase in the number of customers who need a quick property sale because of divorce or separation.

"Changes in a relationship causes all manner of problems and we hope that providing the ability to purchase any property quickly will prevent any missed mortgage payment issues and therefore avoid any detrimental effects on either partners' credit rating".

National Homebuyers also provide a Sell and Rent Back solution where the property is sold, but the vendor can remain in the property as a tenant for any space of time.

"We often find this solution of great benefit to those going through a relationship split" adds Mr King.

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