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) and almost double the amount of time looking for a time looking for a car (six days), credit report provider Noddle.co.uk has found.
We also spend almost as long (three days) searching for an outfit for a special occasion or for the latest gadget or tech equipment (2.5 days) as we do a mortgage. And one in four mortgage holders (26%) don’t shop around at all, often taking the first product offered (19%).
Kevin Roberts, director, Legal & General Mortgage Club, said: “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.”
And while taking what’s on offer from the first mortgage provider you speak to won’t necessarily be a bad deal, consumers are certainly taking a chance.
The difference in rates on 2-year fixed deals offered by the main high street banks for example, vary from 1.84% to 4.22% (for those with a product fee of £995). This equates to an additional £3,000 a year on a typical £200,000 mortgage when comparing the best and worst rates.
Jacqueline Dewey, managing director at Noddle.co.uk, 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.
“This is why we’ve teamed up with award winning online broker Trussle. Consumers can check their credit score and report for free with Noddle to help understand how they are likely to be viewed by lenders, find out how much they could borrow and then get access to mortgage brokers who can recommend the best mortgage for their circumstances before they apply.”
It seems that a lack of knowledge around how mortgages work is the root of some buyers’ aversions to shopping around.
More than one in three homeowners (36%) claimed to know little to nothing about mortgages and these people consequently spend much less time comparing products before signing on the dotted line.
Almost one in five (17%) have found themselves stuck in a financial contract they are not happy with because they didn’t spend enough time reviewing it originally.
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.
This underlines that many people need help to understand more about what mortgage deals they are likely to be accepted for before they apply and how their credit score may impact their options.