Not speaking to a financial adviser while seeking a mortgage is costing borrowers thousands.
According to research by Legal & General’s Mortgage Club, almost a third of borrowers (31 percent) went direct to their lender, not realising how a financial adviser could help them find a better deal.
Failing to look for a better deal
The research showed that those who didn’t look for independent advice on their mortgage were also more likely to stay with the same lender without looking for a better deal elsewhere.
Legal & General quizzed more than 2,000 UK homeowners. A third told them they didn’t know how a mortgage adviser could help with their search for a home loan.
Two-thirds (69 percent) of borrowers who went direct to a lender hadn’t remortgaged in the last five years. Almost three-quarters (74 percent) chose to stay with their current lender because, they told Legal & General, they thought they already had a good deal.
Independent mortgage advisers have access to thousands of loan deals involving all of the major lenders and more specialist lenders.
However, three in five (60 percent) of those who didn’t look for advice before taking out their last mortgage had no idea a mortgage adviser was there to help the borrower; a third (34 percent) thought the adviser supported the lender.
Kevin Roberts, director of Legal & General Mortgage Club, said: “The value that mortgage advisers can bring to borrowers can make a huge difference when it comes to moving on to 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.
“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.”
Legal & General Mortgage Club plans to use the research to tackle the misperceptions about mortgage advisers an raise awareness about how they can help borrowers to find the right mortgage for their needs.