Homeowners urged to hunt down mortgage deals

Posted 2008-05-29

Money website Fool.co.uk has advised homeowners to make overpayments on their mortgages to avoid not having access to good mortgage deals when their current loan ends.

The website stated that homeowners should take "immediate action" as lenders are continuing to restrict their best loans to borrowers who owe little in comparison to the value of their house.

It added that people attempting to borrow more than 90 per cent of their propertys value increasingly have to take standard variable rate mortgages.

David Kuo, head of personal finance at the website, said: "A modest fall in house prices means that small overpayments of £3 a day will be enough to reduce the loan-to value to 90 per cent. This is equivalent to giving up a store-bought cappuccino every day."

He added that if prices fall by as much as 20 per cent, more extreme savings will be required.

According to a British Bankers Association report, the number of mortgage approvals granted in April declined by 40 per cent compared to the same month the previous year.

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