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Additional costs could cost mortgage industry £20 million a year

Additional costs in relation to various FSA proposals could cost the UK mortgage industry in excess of £20 million a year. These proposals include more in-depth checks in relation to the financial situation of customers and the banning of self certified mortgages and loans in excess of 25 years. The FSA is also looking to place the emphasis upon mortgage lenders to prove each customer is able to cover their mortgage payments which is a slight change to the situation at the moment.

While the subtle changes will lead to higher costs, forecast to be in the region of £20 million year, who will cover these additional charges?

The sad truth is that UK consumers will cover the cost of any additional charges seen by the mortgage industry. Yet again, it may not happen overnight, but ultimately we will see an increase in service charges, interest rates and administration fees associated with the mortgage industry which will be covered by customers. This comes at a time when mortgage rates are relatively low, and will indeed have little real impact upon budgets, but as mortgage rates slowly recover they will begin to eat into household finances.

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