Mortgage lender fees rocket 70%

Mortgage lender set up fees have soared 70.3% in the last four years, according to recent research.

The average fee a lender charges for a mortgage was £899 in March 2009 when base rate fell to 0.5% but is now £1,514.

The average fee for a two-year fixed mortgage is now £1,595 and the average fee for a five-year fix is £1,014.

The highest fee is an eye-watering £3,990 charged for a five-year fixed rate product.

There can be no logical reason why fees should have increased so much. In the space of just August and September alone, they have increased by an average of £42.

Mortgage administration costs cannot possibly have increased 70%. Dealing with lenders on a daily basis as I do, I can certainly vouch that their service delivery standard hasn’t improved on the back of it – on the contrary in some situations , it has in fact worsened, so why are fees so high?

It is possible that lenders are keen to push fees because they are pure income and they get the money at the start of the mortgage.

But don’t forget, paying a large fee doesn’t necessarily guarantee a better rate – it all comes down to loan size. For example a percentage based fee can work well on the smaller mortgage sums against a set fee structure, but for a larger loan it is the other way round.

If you are unsure, talk to someone like myself who can guide you as what is the best thing to do.

This one goes out to all the ladies..

Life insurance premiums for women will rise by up to 15% before the end of the year with implementation of the EU Gender Directive due on 21 December 2012.

So if you want to do something about it, the time to do so is rapidly running out.

Although life cover has been traditionally cheaper for women because on average they live longer than men, premium costs are likely to increase as both men and women will soon have to pay the same basic premiums.

To avoid this impending price hike, all new policies must have a start date of no later than 20 December 2012.

And to qualify for gender specific premiums applications must be underwritten and accepted with the premium and any exclusions clearly defined, although the premium doesn’t need to have been paid until 20 December 2012.

However, one word of warning, some insurers may start to change to gender neutral pricing before then

 When 20 December 2012 has passed it won’t be possible to secure gender specific premiums in the future as start dates cannot be back dated. So come 21 December, it will be too late.

It is also important not to leave things to the last minute - give the insurance company time to do its work.

Almost all life insurance goes through an underwriting process, for some this is almost instant but for others it can involve getting a standard report from your doctor which can take up to four weeks.

Given that there is likely to be a last minute rush and that there is no flexibility on the cut-off date applying early could be prudent.