According to some new recently released research from the Halifax, first time buyers are often confused by all the jargon in the mortgage industry and who is to blame them with LTV, KFIs and SVRs to contend with.
Apparently just one third were able to say what a KFI is.
KFI stands for Key Facts Illustration and is the standard format in which all mortgage advisors are required to present the details of a mortgage to a buyer. It is meant to present details in a clear manner.
Perhaps first time buyers couldn’t say what it stood for, but of the two thirds that didn’t, they had a good guess at things like ‘key facts instrument’ or ‘knowledge facts information’. Is it a real problem if they didn’t know what it stood for as long as they received the document and understood its contents?
The good thing is, most knew what the ‘completion date’ was and other such things. At the end of the day, mortgage advisors are there to guide buyers through the process and there is no need for buyers to memorise what everything stood for, providing they understood the options open to them so they can choose what it most suitable to them. That’s why people take their CeMAP training, so they can understand all the terminology. Many buyers know what they actually chose for their own mortgage and forget the rest until it comes time to choose again.
Jaedon Green, head of mortgage development at Halifax, said: “Understanding mortgage jargon can be difficult for many first time buyers who are new to the housing market. Our experience shows they need a combination of advice, expert knowledge and mortgage deals which help make the first steps on the property ladder easier.”
