Are you a first time buyer?
According to a recent research from Santander, over 60% of those buying their first home believe that they can borrow up to ten times their income, 76% thought that the term LTV stood for ‘long-term value’ rather than the amount their property will rise in value over the term of the mortgage, and 70% believe the seller is obliged to tell buyers about problems with the property.
The survey also found that nearly half of all those surveyed, thought that if a chain collapsed, they would be due a refund of solicitor fees and survey costs.
Therefore, it would come a shock to many buyers that lenders will only lend up to four times a borrower’s income and that they had to undergo strict affordability tests in order to get a mortgage offer.
The reason for these statistics and a clear misunderstanding of the market is that the home buying process can be very complicated with jargon and confusing changes in legislation. There are also several acronyms related to mortgages including LTV (loan to value), APR (annual percentage rate) and SVR (standard variable rate) and terms like ‘exchanging contracts’ can be confusing when it doesn’t mean that the sale is complete.
It was also revealed that 40% of buyers thought that interest rates on a mortgage would stay the same for the loan period whereas once the fixed rate deal has ended (usually 2, 5 or ten years) the rate would move to the more expensive SVR.
Finally, many buyers thought that buildings insurance was optional if you had a mortgage.
If you would like to make the process as simple as possible, at Urban Union reserving and buying a property directly through us is simple compared to buying a property for sale on the open market. Talk to us to find out more.