According to a recent survey by Noddle, a credit report service which was launched in 2011 by British company Callcredit, us Brits spend 5 days looking to book a holiday or 6 days to find a car, yet only take a mere 3.6 days to make what is probably the biggest purchase of our lives, the property we are going to live in or invest in.
Noddle found that an astonishing 26% of homeowners tend to select the first available mortgage they can find and not shop around. It’s a bizarre statistic given that people spend more time shopping online to find a good deal than when they are about to go into debt for hundreds of thousands of pounds.
Over a third of people didn’t know how mortgages work and half that number were not happy with the mortgages they are now stuck with.
Ken Simmons, a top mortgage adviser at one of Hertfordshire’s leading financial planning and financial advice companies, Lyndhurst Financial Management, says
“The statistics are quite shocking and I think one of the reasons might be that people feel they don’t have the same choices and control when trying to secure a mortgage deal, as opposed to buying a holiday or car. It’s the biggest personal investment most people are likely to make and while the first offer might not be a bad deal, when so much is at stake I think it’s a huge error not to investigate what other options are available to you as the sums involved can vary enormously.
For example, the two-year fixed deals rates offered by the main high street banks can vary from 1.84% to 4.22%, some of which also have a ‘product fee’ of nearly £1000. This rate difference can mean that you might be paying an additional £3,000 a year on a typical £200,000 mortgage. In some cases the quick decision on taking the first mortgage offer might be concerns about your credit rating throwing doubts on whether you’d find another deal.
While it’s exciting to find a property you want to buy, it is inevitably a stressful process, getting the mortgage, sorting out the legalities, filling in forms, managing your finances. However, when a rushed decision can add thousands of pounds to your payments the best course of action is to take advice from a professional who can give you information on the best deals available to suit you and your budget. Mortgage advisers can provide invaluable advice on the thousands of products on the market and also ensure that the process of acquiring a mortgage is as smooth as possible.”