First time buyers could be better off putting down smaller deposits on a property because of an anomaly in the higher lending charge (HLC) system, according to Fool.co.uk.
Fool.co.uk claims homebuyers who put down a 5% deposit could actually end up paying more for their mortgage than those placing a 4% deposit. The website says HLCs are typically applied to all loans of more than 90% LTV and usually cost around 1.6% of the value of the loan. However, many lenders offering loans of between 96% and 100% do not charge an HLC, according to Fool.co.uk. HLC costs are also not included in many loan comparisons, because the calculations made to assess the charge are complex, meaning many buyers might not realise there are extra costs involved. Fool.co.uk says a t...
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