First-time buyers baffled by mortgage jargon like negative equity and stamp duty
SWNS
2023-10-27
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First-time buyers remain baffled by mortgage jargon - such as negative equity, stamp duty and conveyancing.
As a result, 60 per cent are worried it’s slowing the purchase down, and 52 per cent fear they could miss out on a better deal because they can’t get to grips with the terminology.
The study of 1,000 adults in the process of getting on the property ladder also found terms like annual percentage rate, underwriting and decision in principle are puzzling prospective buyers.
But 35 per cent of these also think mortgage product names make them difficult to understand what they actually are.
And many don't know if the likes of Shared Ownership or Joint Borrower, Sole Proprietor mortgages will actually suit their needs.
While 39 per cent would even like to see mortgage products renamed so that they are easier to understand.
The research was commissioned by Skipton Building Society [https://www.skipton.co.uk/mortgages/first-time-buyers/mortgage-help], as part of its campaign to simplify the homebuying journey to enable more first-time buyers to step onto the property ladder.
Jen Lloyd, head of mortgage products at the building society, said: “In an increasingly complex landscape of mortgage terms and product names, first-time buyers are finding themselves navigating uncharted waters.
When it comes to demystifying the complex jargon, 34 per cent of those polled are seeking clarity from their parents rather than the mortgage experts themselves.
With another 35 per cent choosing to use the internet, but not banking sites, to try and increase their understanding.
Throughout the process, these bewildered buyers have found applying for a mortgage, dealing with their solicitor and finding a mortgage the most confusing.
Consequently, 77 per cent of these say this has added to their stress levels.
It also emerged 79 per cent of all first-time buyers feel the homebuying process would run a lot smoother if everyone just spoke in layman's terms.
And 41 per cent have had to bluntly ask someone to speak in more simplified terms during their journey.
Due to the complexities faced when buying a home, 46 per cent wish they had been taught more at school about it so they would be more prepared now it is finally upon them.
The research, conducted via OnePoll.com, also found 24 per cent of those currently trying to buy their first home are receiving financial support.
Of these, 83 per cent feel it is ‘impossible’ to get on the property ladder without a cash injection from elsewhere.
Nearly six in 10 (58 per cent) of these have been given a lump sum towards their deposit, while 32 per cent have been offered help with moving costs.
And 23 per cent of these found the Joint Borrower, Sole Proprietor mortgage to be the best option for them for getting onto the property ladder.
As a result, 60 per cent are worried it’s slowing the purchase down, and 52 per cent fear they could miss out on a better deal because they can’t get to grips with the terminology.
The study of 1,000 adults in the process of getting on the property ladder also found terms like annual percentage rate, underwriting and decision in principle are puzzling prospective buyers.
But 35 per cent of these also think mortgage product names make them difficult to understand what they actually are.
And many don't know if the likes of Shared Ownership or Joint Borrower, Sole Proprietor mortgages will actually suit their needs.
While 39 per cent would even like to see mortgage products renamed so that they are easier to understand.
The research was commissioned by Skipton Building Society [https://www.skipton.co.uk/mortgages/first-time-buyers/mortgage-help], as part of its campaign to simplify the homebuying journey to enable more first-time buyers to step onto the property ladder.
Jen Lloyd, head of mortgage products at the building society, said: “In an increasingly complex landscape of mortgage terms and product names, first-time buyers are finding themselves navigating uncharted waters.
When it comes to demystifying the complex jargon, 34 per cent of those polled are seeking clarity from their parents rather than the mortgage experts themselves.
With another 35 per cent choosing to use the internet, but not banking sites, to try and increase their understanding.
Throughout the process, these bewildered buyers have found applying for a mortgage, dealing with their solicitor and finding a mortgage the most confusing.
Consequently, 77 per cent of these say this has added to their stress levels.
It also emerged 79 per cent of all first-time buyers feel the homebuying process would run a lot smoother if everyone just spoke in layman's terms.
And 41 per cent have had to bluntly ask someone to speak in more simplified terms during their journey.
Due to the complexities faced when buying a home, 46 per cent wish they had been taught more at school about it so they would be more prepared now it is finally upon them.
The research, conducted via OnePoll.com, also found 24 per cent of those currently trying to buy their first home are receiving financial support.
Of these, 83 per cent feel it is ‘impossible’ to get on the property ladder without a cash injection from elsewhere.
Nearly six in 10 (58 per cent) of these have been given a lump sum towards their deposit, while 32 per cent have been offered help with moving costs.
And 23 per cent of these found the Joint Borrower, Sole Proprietor mortgage to be the best option for them for getting onto the property ladder.
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