Arrangement fee woe for many according to National Homebuyers

Mortgage borrowers are getting into financial difficulties because they are being advised to add an arrangement fee onto their deals.

[ClickPress, Wed Apr 23 2008] According to uSwitch, arrangement fees add an average of 112 per cent to the cost of the original set up fee.

Further to this, almost 900,000 borrowers have had fees added to their mortgages without realising that they had agreed to it.

The problem is leading to financial difficulties for many and uSwitch said that it is always better to pay the fee upfront.

"Adding fees to a mortgage means that you will be spreading the amount over many years and paying interest for the pleasure of doing so - this is an extremely expensive option and should always be seen as a last resort," said Ann Robinson, director of consumer policy at the firm.

"If you can in any way manage to pay the fee upfront this will always be your best option.


"Otherwise buyers should make sure that they make regular overpayments to minimise the impact of high interest costs - as they could end up doubling the original cost of an arrangement fee," she added.

Fast property sale expert Julian King adds, "The deliberately difficult conditions on getting a mortgage will not only be bad news for potential buyers who would otherwise be happy to get their foot on the ladder and kickstart the market once more.

"This is also hugely bad news for the homeowner who simply cannot find a buyer for their property, forcing them to sell at well below the already deflated price they were expecting".

Mr King is a director of National Homebuyers, the UK's leading quick property purchase firm. The company guarantees to make an offer to purchase any property in the UK for homeowners who need a quick sale. The company also provides a series of mortgage rescue solutions such as 'Sell and Rent Back' for property owners who are facing repossession.

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