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First time buyers often confused by mortgage jargon

The research by Halifax found that two thirds of first time buyers could not correctly identify the letters KFI with regards to mortgage advice.

Only a third of those new to the property ladder were aware that the acronym KFI stands for Key Facts Illustration which requires all lenders to set out the details of a mortgage product in the same format so it is easier to compare mortgages.

Popular definitions proposed by first time buyers included Key Facts Instrument, Knowledge Facts Information and Knowledge For Improvement with 5%, 24% and 4% respectively.

Halifax believes that it should be easier for potential buyers to understand financial terminology and mortgage jargon.

The research found that the majority, 81%, correctly defined 'completion date' as the day ownership of the property is transferred and you become the legal owner. Despite being known as 'settlement' in Scotland, 87% of first time buyers in Scotland knew the definition for completion date.

Those in the 35 to 44 years old age group had the best understanding of 'gazumping' which appeared in the housing boom of 1980s with 86% understanding the phrase whereas younger buyers didn't understand that it meant that your offer on a property is accepted but then subsequently turned down because a higher offer is placed by another potential buyer.

'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,' said Jaedon Green head of mortgage development at Halifax.