First-time buyers might be thin on the ground at the moment but two-thirds of them cannot correctly identify the letters KFI with regards to mortgage advice.
According to new research by Halifax, only a third of those new to the property ladder are aware that the acronym KFI stands for Key Facts Illustration.
A recent study by Halifax into first-time buyer affordability shows that the house price to earnings ratio – a key affordability measure - has improved significantly over the past 18 months.
With first-time buyer affordability at its lowest level for more than five years, Halifax said it offered them help to better understand financial terminology and mortgage jargon.
Key findings of the research were:
A third of first-time buyers are unsure of KFI definition – A Key Facts Illustration (KFI) requires all lenders to set out the details of a mortgage product in the same format, so it's easier for customers to compare mortgages. Despite this design, it seems the commonly used acronym KFI has left many first-time buyers confused. Popular definitions proposed by first-time buyers included Key Facts Instrument, Knowledge Facts Information and Knowledge For Improvement;
The majority can correctly define completion date – Four out of five first-time buyers (81%) correctly defined the term "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-year-old group have the best understanding of "gazumping" – The term "gazumping" popularised in the housing boom in 1980s was best defined by 35 to 44 year olds, with 86% correctly identifying the phrase. Unsurprisingly, only half of those who were toddlers or younger in that decade (18 to 24 year olds) were able to define the term as "your offer on a property is accepted but then subsequently turned down because a higher offer is placed by another potential buyer."
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