Mortgage fees are to appear in a standard format after an agreement between building societies and banks to help customers from being confused when trying to compare offers and products between lenders.
The Council of Mortgage Lenders (CML) says the new tariff of charges when taking out a mortgage will also not have any hidden costs. They will also, more importantly, be laid out in exactly the same way for all lenders.
This means that mortgage providers will use the standard list of charges and fees which will enable property buyers to compare mortgage deals between lenders more effectively.
In addition, the lenders will also use standard terminology to describe the charges described.
Mortgage lenders have committed to using the CML’s new format
Around 85% of mortgage lenders have already committed to using the CML’s new format and will begin publishing their list of charges before the end of 2015 on their websites.
The charges being described will include application, legal and valuation fees as well as charges for early repayment.
Under the current terms, confusion is caused because an application charge, for instance, can be described by a lender as either a booking fee or an arrangement fee.
For lenders who charge fees that are not on the standard tariff, they will have to make these charges clear on a separate list.
Bridging finance appeals to more brokers
Meanwhile, research has revealed that the number brokers who now consider bridging finance as a potential solution for their customers has grown significantly.
According to bridging loan lender MTF, 93% of brokers said they considered bridging finance to be a useful financing tool in the third quarter – that’s up from 77% in the second quarter.
The survey is part of the lender’s quarterly broker sentiment report which also reveals that 76% of brokers had seen a rise in bridging loan volume in the same period.
Demand for bridging finance is higher
Demand for bridging finance is higher now outside of London with 59% of brokers saying they have seen an increase. The largest increase for bridging loans was seen by brokers in the South West of England.
MTF’s managing director, Tomer Aboody, said it was now a ‘distant memory’ since bridging finance was seen as a last resort for desperate borrowers.
He added: “Over the years, professional standards have improved and the market has matured so lenders operate in their own niches and focus on strengths.
“Borrowers are now dealing with established, transparent and experienced lenders. Bridging finance now sits alongside the mainstream with many borrowers and brokers seeing it as an alternative to High Street finance.”