Do you know that you pay for an insurance policy, not to protect you, but to protect your ever so friendly mortgage company!
 
A report in the Motley Fool explains how A higher lending charge is a fee paid by mortgage borrowers to protect lenders which lend them more than a certain proportion of the value of their home. For example, if you have a 30% deposit, most lenders won't charge you this fee, as you only need a 70% mortgage.
However, if you can only stump up a deposit of 5% and therefore need a 95% mortgage, many lenders will charge you an HLC. This is because you're borrowing more than, say, three-quarters (75%) of the value of a property, so the lender levies an extra charge to reflect the extra risk of borrowing at a higher loan-to-value ratio.
 
Nationwide BS is one of the banks that opted out of the higher lending charge more than five years ago. If you would like more info on such products as the Nationwide mortgage without a HLC, then click here to learn which products they have on offer.

Ajay.

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Posted on: 26th February 2008 @ 15:57:00