Many borrowers could be missing out on the best mortgage deals by going straight to a lender and not seeking help from a broker.
That is according to Legal & General which has uncovered evidence many borrowers did not understand the value of a broker, even though they could provide access to a greater number of deals and specialist mortgages.
Nearly a third of people who went direct to a lender admitted they didn’t understand how a mortgage broker could help with their search, according to a survey by the financial services organisation.
Yet it also found those homeowners who used a mortgage adviser when searching the market for the best deal were more likely to have switched products in the last five years and therefore benefited from opportunities to pay less interest when rates fell.
Additional deals
Legal & General explained that without seeking help from a mortgage adviser they would have missed out on the thousands of additional deals that are only available through brokers.
Data from mortgage sourcing platform, Twenty7Tec, revealed almost 12,000 mortgages were available through advisers compared to just over 2,000 directly on offer from lenders.
Kevin Roberts, director of Legal & General Mortgage Club, said: “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.”
Recommendations
Of those who did use an adviser to take out their last home loan, 98% said they found the support of a broker‘valuable’ and 95% said they would recommend their family or friends use this route.
“The figures speak for themselves,” said Roberts. He added: “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.”
Article by Kate Saines for www.whatmortgage.co.uk