Mortgage confusion biggest hurdle for buyers
The process of applying for a mortgage is the biggest challenge to buying a home, according to research from Experian.
It found 24 per cent of survey respondents believed the mortgage process was the biggest challenge to buying a home, ahead of the 22 per cent who believed securing a deposit to be the biggest obstacle.
The study found over a quarter, 27 per cent, rely on family to help secure the deposit, with the average financial assistance from family being £7,637.
Even with help from relatives, the study shows 33 per cent of first-time buyers took between two and three years to save for a deposit.
Experian claims confusion around the mortgage process stems in large part from additional costs buyers face with 29 per cent of respondents saying they underestimated the costs of moving over and above the cost of the deposit.
The younger the buyer, the more likely they are to underestimate these costs, according to the survey. Of those aged between 25 and 34, 44 per cent said costs were more than they had expected.
Experian says its recently-launched mortgage eligibility tool will help prepare buyers for the process by helping them understand their options.
The tool went through the Financial Conduct Authority’s “sandbox cohort 2” in 2017 and received the green light from the regulator in August this year.
Experian Marketplace & Affinity managing director, Amir Goshtai comments:
“We have become used to checking our eligibility for products like credit cards and loans for some time now, and there’s no reason the service shouldn’t be available in the mortgage market too.
“Making sure consumers are well informed about their options will give them confidence when speaking to a mortgage broker. Experian’s eligibility tool provides straightforward answers allowing buyers to feel prepared without affecting their credit score,” he says.
Source: Mortgage Strategy