Brits Rush Into Mortgages
A recent survey by Fool.co.uk reveals that the average UK homeowner spent five hours selecting their mortgage, with only 21 percent spending more than ten hours to make their decision, and 38 percent take the easiest option and stick with their current provider despite high interest rates, longer terms, and the increased risk of insolvency.
With 1.4 million mortgage holders looking to remortgage their property during 2008, haste in selecting which product to buy could cost thousands.
"Boredom" and "confusion" are the most common reasons for speedy mortgage purchases.
"Who can blame people for wanting to spend more time planning their holiday than pouring over financial products? But while a good holiday will recharge your energy levels for a few weeks, healthy finances can boost your bank balance for a lifetime," said David Kuo, head of personal finance at Fool.
"By taking a bit more time considering such things as your mortgage, you could save up to £3,000 in one year to pay for the dream vacation you’ve yearned for but never quite been able to afford."
The report reveals that consumers spend less time choosing a credit card, taking an average of three hours and 21 minutes, while personal loans take three hours and 8 minutes. Overall, consumers spend more time choosing a vacation than they take choosing a mortgage.
Andy Gray, head of mortgages at Woolwich said: "The overall economic outlook means there are still inflationary pressures in the UK economy and therefore, although the overall trend is interest rates are down, there is a little more uncertainty as to how quickly they will fall.
"We therefore think over the next few weeks there will be an increase in demand for fixed rates over trackers, especially for those that are competitively priced."
A Woolwich spokesperson said in a recent report that consumers can overpay by 10% by not shopping for a low interest product.
Published on February 1, 2008
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