A third of borrowers unaware of value of mortgage advice
31% of borrowers going direct to a lender didn’t know how an adviser could help their mortgage search, according to new research from Legal & General who say thousands are missing out on a better mortgage deal as a result.
60% who didn’t seek advice when they took out their last mortgage didn’t know mortgage advisers were there to help the borrower, and just over a third (34%) thought a mortgage adviser was there to support the lender.
The findings also showed that more than two-thirds (69%) of borrowers who went straight to a lender hadn’t remortgaged in the last five years and nearly three-quarters (74%) stayed put because they felt they had ‘a good deal’.
Legal & General Mortgage Club says the mortgage industry still needs to demonstrate the value of mortgage advice for borrowers, as just 30% of those who went direct to their lender said that they would likely speak to a mortgage adviser next time.
Data from mortgage sourcing platform Twenty7Tec shows that almost 12,000 mortgages are available through mortgage advisers, compared to just over 2,000 directly on offer from lenders to consumers.
Additionally, homeowners who used a mortgage adviser were more likely to have switched in the last five years (29%), compared to just 19% of those who went direct.
Borrowers who used a mortgage adviser were also overwhelmingly in favour of doing so again. 98% said that they found the support of a mortgage adviser ‘valuable’ and 95% said they would recommend using a mortgage adviser to family or friends.
Kevin Roberts, director at Legal & General Mortgage Club, commented: “Whether someone is taking out their very first mortgage or unlocking housing wealth in retirement, the value that mortgage advisers can bring to borrowers can make a huge difference when it comes to moving onto and up the property ladder. Yet, our research shows that potentially thousands of borrowers still don’t know how a mortgage adviser can help with their mortgage search and as a result they could be missing out on a better deal.
“The figures speak for themselves. Those who used a mortgage adviser when they took out their last mortgage would overwhelmingly recommend their family and friends to seek independent, professional advice. They’re also more likely to switch their mortgage product and when they do borrowers can have access to nearly six times the number of products available than if they went direct. Buying a home is the biggest purchase an individual will make in their lifetime, so it’s vital for buyers to speak to a mortgage adviser who can help them to understand their borrowing needs and find the right mortgage.”
Source: Financial Reporter