Which! Says Watch Those Mortgage Advisors
September 2005
Which! magazine makes a very good point when it warns consumers to expect poor standards of service from mortgage providers. In its latest report on the matter it says just 3 mortgage advisors out of 39 that it visited gave acceptable advice!
Education & Profits
The main gripes of the Which! report are as follows;
- Half of the mortgage advisors didn't explain properly all the different ways and associated advantages/disadvantages of repaying a mortgage
- Over half did not explain properly the different deals available
- The Mortgage Code is in place to protect consumers from given bad advice, 7 out of the 39 advisors didn't mention it while 14 gave misleading information - Mortgage Code website
- The High St banks and building societies failed to let the consumers know that they only recommended their products when the mortgage code states very clearly that they must make consumers aware of this
- Many advisors made a big deal about searching 'the entire mortgage market for the best deals' but they could only sell mortgage insurance from one company
- Frighteningly, some mortgage advisors and consultants focus more on selling mortgage protection schemes and policies than they gave on actual mortgage advice (protection policies are a real money spinner for finance firms)
Bad Mortgage Advice Will Cost You Thousands!
A mortgage for most people is their single biggest financial liability yet many are still giving far too much trust to the financial companies and institutions that are selling or advising them.
Of course it again goes down to financial education, for the more you know and understand about the product you're buying the easier you'll spot the financial advantages or disadvantages for your own pocket.
The banks and mortgage advisors are not stupid, they fully understand what they're selling and which products make the most profit. Therefore, when confronted with a prospective buyer the choice to sell them a product that's in the banks/advisors best financial interests and not the clients is often to tempting not to take. Remember many of these firms pay commissions on profits generated and the best mortgage deals might only pay them £100 per application but others pay £500+.
Summary
- Those who get the best deals in the personal finance world are those that understand the products best
- It doesn't have to be hard, you don't have to go back to school or sit in a classroom to get financially education
- Just take your time and read what's published on the internet, hire some books from your local library, go and see 2-3 different mortgage brokers etc, and finally,
- NEVER trust a financial institution or advisors to give you the best advice! (unless of course you check out the InvestorProfit.com article - How to find a good Financial Advisor)
- This is not to say that all financial firms are out to make the maximum money without caring about their clients' finances
- But recent history suggests this is the case especially when dealing with customers who have little knowledge in what they've actually buying and hence don't realise they're overpaying or not buying the cheapest and best value products
Having said all of that we would still strongly advise that the majority of people do visit a mortgage advisor because they can still source the best available deals.
It's all about knowing your enemy and the tricks he/she might try and play, then with your knowledge you can soon spot the good and the bad of what's being offered, and hence get a great mortgage, one that is of a real financial benefit for you.
Good luck with your mortgage education!
See Also
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