Do You Understand Your Home Owner Loan?
The vast majority of people in the UK who own their own home either currently have, or have had in the past, a home owner loan or mortgage of some type in order to allow them to buy it. But whilst many borrowers are quite happy to take out a new home owner loan, the majority of these people do not fully understand the loan they are applying for.
The news comes from research which has been conducted by First Direct, who found that in a survey, around 92 per cent of individuals who were planning to buy a house and apply for a home owner loan within the next twelve months, did not fully understand the different options which were available to them.
More worrying still is the news that around 11 per cent of potential house buyers said that they had no understanding at all of how the various types of home owner loans and mortgages work.
Furthermore, only 26 per cent of exiting borrowers said that they fully understood the details of the home owner loan or mortgage which they were currently paying.
As a result of this, many borrowers are likely to be missing out on the best loan deals which are available to them and also adds strength to the argument as to why potential borrowers should seek independent financial advice before applying for a new loan.
Richard Tolchard of First Direct commented on the figures, he said “It’s really important that people do their research into which is the best mortgage product for them, taking into consideration their stage in life and current financial circumstances.”
“They should always try to compare like for like and bear in mind that fees can play a large part in how a mortgage stacks up against the competition.”
