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A fifth of borrowers spend less than a week researching their next mortgage

Latest research from The Legal & General Mortgage Service (LGMS) reveals that one in five UK homeowners (22 per cent) spend a week or less looking into mortgage products before they make a decision to buy, with almost half of borrowers (49 per cent) spending a month or less on research. This is despite the fact that a mortgage is likely to be the largest financial commitment many people make in their lives.

The research was carried out in connection with the launch of the new Mortgage Service from Legal & General, which provides potential borrowers with access to whole of market mortgage advice through Legal & General’s network of mortgage advisers.
Offered by a FTSE 50 company, LGMS is an independent mortgage advice service, which builds on Legal & General’s already strong experience in the mortgage advice sector. Covering the whole of the UK, the service will differ from other large financial institutions in that it will offer independent advice on a large number of mortgage products and lenders, enabling consumers to find the product best suited to their individual needs.
LGMS wants to help borrowers better understand the options available to them when finding their next mortgage, and to ultimately save them time, money and hassle when making decisions on mortgage products.
Jonathan Barrett, Head of The Legal & General Mortgage Service, says: “Mortgage advisers work to remove the stress associated with researching and applying for a mortgage, and ensure that borrowers receive all the information and advice they need to help them make informed decisions. With the number of products currently available, the importance of getting independent mortgage advice cannot be underestimated. This is especially true given the current market conditions of reduced lending and more stringent criteria. Although strict lending criteria makes it more difficult for many borrowers to get a mortgage, it is important that buyers find a product which best suits their specific circumstance and don’t settle for second best.
“The results of the survey highlight a bemusing approach to how people select their next mortgage. A mortgage is likely to be the largest financial commitment many will make and yet one in five buyers are happy to spend less than a week considering it. The mortgage market can be extremely complicated, and a ‘one size fits all’ approach won’t be suitable for everyone. Providing access to a national advice service will allow borrowers to experience a better way of finding their next mortgage, and ensure their individual needs are properly met.”

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5 per cent mortgage from Ipswich ahead of Help to Buy

Last week’s budget saw the announcement of the Help to Buy scheme. The government scheme aims to stimulate the housing market and increase the availability of lower deposit mortgages in the market place.

Ipswich Building Society has said that, whilst it welcomes the Chancellor’s attempts to get the housing market moving, it still needs to see full details of the new ‘Help to Buy’ scheme proposed in the March budget before it can fully assess its potential.

Prior to the announcement of Help to Buy Ipswich Building Society launched a two year fixed rate mortgage for a 5 per cent deposit at 5.49 per cent, 5.7 per cent APR (fixed until 31 July 2015, the mortgage will then transfer to the Society’s standard variable rate, currently 5.49 per cent). This low deposit mortgage is available to First Time Buyers and those looking to remortgage a property in England and Wales. Completion fees are £975 with application fees of £150. Other fees and charges apply.
Paul Winter, Chief Executive, Ipswich Building Society says: “We believe that everyone should have the opportunity to own their own home and appreciate that it can be very difficult to raise a large deposit. We have worked hard to develop a sensible range of mortgage products that offer options to a range of buyers with varying levels of deposits.”
The Help to Buy scheme has two options. The first of these offers buyers of new build homes an interest-free equity loan from the Government. This scheme will be offered from 1 April 2013 and is available to both first-time buyers and existing home owners who wish to move to a new build property. The buyer will still need to raise a deposit of the value of 5 per cent of the house they want to buy, but can borrow a further 20 per cent on an interest-free basis (up to a maximum £120,000 loan) from the Government.
The second part of Help to Buy, which is a separate initiative to be introduced from the beginning of 2014, will provide a borrower with a guarantee from the Government to underpin their mortgage for up to 80 per cent of the loan, provided the purchaser provides a 5 per cent deposit. It is hoped that this initiative will encourage more lenders to provide lower deposit mortgages. There is to be further consultation undertaken before details are announced later this year.

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