"The excitement of finding a house you’ve fallen in love with, combined with worries about being accepted for a mortgage, means it can be easy to rush a decision"
26% of homeowners don't shop around at all when it comes to their mortgage, selecting the first available one, according to Noddle research.
36% said they have little knowledge of how mortgages work and nearly one in five (17%) are now stuck in a financial contract that they’re not happy with.
And despite being life’s biggest purchase, Brits spend less time searching for a mortgage (3.6 days) than they do for a holiday (five days) or a car (six days).
Noddle says that while borrowers taking what’s on offer from the first mortgage provider they speak to won’t necessarily be a bad deal, consumers are certainly taking a chance.
The difference in rates on two-year fixed deals offered by the main high street banks vary from 1.84% to 4.22% (for those with a product fee of £995), equating to an additional £3,000 a year on a typical £200,000 mortgage.
Brits are also worried about their credit scores. Nearly one in four mortgage holders (23%) said they took the first mortgage they were accepted for because they worried that applying for others might damage their score and jeopardise getting one altogether.
Jacqueline Dewey, managing director at Noddle, said: “The excitement of finding a house you’ve fallen in love with, combined with worries about being accepted for a mortgage, means it can be easy to rush a decision about a mortgage.
“But when we’re talking about thousands of pounds on the line it really does pay to do your research. Rates vary across the market so don’t take the first deal available and try to speak to more than one lender. Understanding your credit score and getting it in good shape beforehand will also help you get the best rates."
Kevin Roberts, director at Legal & General Mortgage Club, commented: “There’s no denying that that the mortgage process is tedious. Perhaps, this is why consumers spend so little time searching for a mortgage and instead leave the legwork to a mortgage broker who can help buyers find a great deal. As well as providing invaluable advice on the thousands of products available in the market, they also help to make the process as smooth and as efficient as possible for consumers.
“Our Value of a Broker research found that a third of those who used a broker said it removed the hassle of filling out forms and applications – so it’s no wonder that savvy borrowers are taking advantage of their services and focusing their efforts on finding their dream home, holiday or car instead.”