Borrowers Aware of Interest Rate Risks

GMAC-RFC

Recent research by GMAC-RFC has found that most borrowers are aware of risks involved when taking out a mortgage.  

Just 10 per cent did not take into account possible interest rate rises when taking out their mortgage, although more than 20 per cent of people said that they did not read the Key Facts Illustration.  

In light of this research Key Facts Illustrations (the quotation that you are issued with before the mortgage is applied for) have come under fire, and the possible need for them to be made easier to understand.  

Our view

The warnings held in the Key Facts Illustrations are not bold enough and both broker and mortgage company have a duty to ensure that the client understands all aspects of the mortgage.  The reality is that many people just ‘nod’ or agree when they should stop at points they do not understand despite how trivial they may think they are.  

We will never overcome human nature.

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