Homeowners warned of changing their minds on mortgages

Date:Monday 17th November 2008
Author: Susanna Kavka

Homeowners looking to secure a new mortgage deal swiftly to benefit from falling rates have been warned of the penalties of changing their minds later.

A report in the Independent explains that lenders are tightening circumstances which allow borrowers to reserve a rate up to six months in advance and change their minds in the meantime without penalty if they find a better deal.

Louise Cuming, head of mortgages at Moneysupermarket.com, told the paper that more people are backing out of such deals as the base rate came down.

And David Hollingworth of mortgage broker London & Country warned that valuation fees can now be payable upfront and customers can be charged to reserve their rates.

In related news, Scottish newspaper the Sunday Herald reported that the slump in the housing market is tempting some people into buying-to-let.

But as more people let their homes because they cannot sell them and property developers rent out homes for which they cannot get buyers, landlords may find it difficult to make a profit as supply increases.