Mortgage Guarantee

charlotte4940

Hi, please can someone help me with the mortgage guarantee scheme that is available in Jan 2014? Will you go through the mortgage lender as normal or will there be a specific 'broker' that you will have to use? Does anyone have an idea of how much the fee will be?

Thanks

kingstreet

You'll be able to go direct.

You will not have to use a broker.

amnblog

What fee Charlotte?

charlotte4940

I heard that there will be a fee for using the mortgage guarantee service but it is yet to be decided how much it will be. I'm guessing they banks will charge a product fee on the mortgage.

kingstreet

The fee you are hearing about is the fee the Government will charge the lender for taking part in the scheme, for Government adverts etc.

There will be usual product fees, but as this is very similar to the NewBuy scheme, it shouldn't be too different from the borrower's point of view.

charlotte4940

Oh I thought the borrower would be charged a fee for using the government as a guarantee. I was guessing around the £1000 mark with I pressumed would be charged as a product fee when taking out the mortgage.

kingstreet

We don't know the cost yet.

For the current NewBuy scheme, the builder pays 3% of the property price into the indemnity fund.

If the new scheme mirrors the old mortgage indemnity insurance schemes from the 80s and 90s, it could be a couple of grand.

I suspect it won't be. We'll have to wait and see...