Is it a Good Idea to Use an Online Mortgage Advisor or Broker?

Online mortgage advisors have become popular in recent years by making the mortgage process easier. They work slightly differently to traditional advisors and brokers, so finding the right one will require some research.

John Fitzsimons Published on 16 April 2021.
Is it a Good Idea to Use an Online Mortgage Advisor or Broker?

If you need a new mortgage then you may want to use a mortgage adviser. Advisers can discuss your situation and help you work out the type of product you need, as well as guide you towards lenders who are most likely to look favourably on your application.

In addition, some lenders only offer their deals through these intermediaries, so using an adviser means access to a greater range of mortgages.

However, using an adviser doesn’t mean having to set aside time for a face-to-face meeting, thanks to the growing prevalence of online mortgage advisers.

What is an online mortgage adviser?

Historically, dealing with a mortgage adviser meant meeting up with your adviser in person to discuss your requirements, or committing to a number of lengthy phone conversations.

But recent years have seen a crop of online mortgage adviser firms popping up, promising to let you do everything you need to get a loan from the comfort of your couch.

» MORE: About mortgage advisers

How do online mortgage advisers work?

Online mortgage advisers often work a little differently from traditional advisers, in that many rely on technology to do most of the heavy lifting in finding the right deal for you.

Usually, you will need to answer a series of questions about yourself and the property you want to buy, and then the adviser’s system will kick in, running through the deals you may be eligible for and highlighting which are most suitable.

You can then crack on with making a formal application and hopefully getting your hands on the keys to your new house.

Online mortgage advisers tend to have qualified advisers in the background, ready to step in and offer more personalised help if you need it. You may also be allocated a member of staff who will keep you updated on the progress of your application.

Is it safe to use an online mortgage adviser?

It’s important to do your research into any mortgage adviser you are considering using, whether online or in person. You can do this by speaking to friends and family, or by using sites like Trustpilot so that you can get an idea of what to expect.

From a security perspective, using a credible online adviser should not be any different from using a traditional adviser.

All mortgage advisers, whether they offer advice in person or online, are regulated by the Financial Conduct Authority (FCA), the main financial regulator. As a result, not only do they have to gain certain qualifications, they also need to provide a comprehensive audit trail to support the advice they provide.

In other words, they have to be able to show why they have recommended specific products or lenders.

» MORE: About mortgage lenders

You can check that the online mortgage adviser you are considering using is registered on the FCA Register.

What’s more, if you believe you’ve been mis-sold a mortgage, or the advice wasn’t up to scratch, then you can pursue a complaint with the Financial Ombudsman Service, which could result in being awarded compensation. This protection is in place for both traditional and online mortgage advisers.

Pros and cons of an online mortgage adviser

One of the big positives of using an online mortgage adviser is that it’s very simple and you can start your mortgage journey from the comfort of your own home.

There’s also the fact that plenty of online mortgage advisers don’t charge a fee for their advice. While they are paid a commission by the lender ‒ called a procuration fee ‒ for placing a case with them, you won’t have to pay a penny to the adviser.

There are some downsides to consider though. A broker will be able to get a better understanding of your circumstances if you meet them face-to-face or have a proper chat on the phone. A computer algorithm might struggle with the nuances of your situation, particularly if you have more complex requirements.

What’s more, a mortgage is a huge commitment. It’s the largest debt most people take on in their lives, and so you may feel more comfortable discussing your requirements ‒ and exactly what it will end up costing you ‒ with a real person.

Image Source: Getty Images

About the author:

John Fitzsimons has been writing about finance since 2007. He is the former editor of Mortgage Solutions and loveMONEY and his work has appeared in The Sunday Times, The Mirror, The Sun and Forbes. Read more

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