Mortgages: combine comparison sites with consultation
One of the latest, most remarkable trends in the property market is a ‘record high’ in cash buyers. According to the Nationwide, about four in 10 people bought properties without the need for a mortgage in the first part of this year. As the building society explained in its May 2015 House Price Index report: “We estimate that the share of cash purchases in the housing market reached an all-time high of 38 per cent in Q1 2015.”
While this might conjure up images of large cash transactions – maybe even a few suitcases of banknotes – there’s no getting around the fact that the UK still remains a nation of mortgage devotees. Maybe it’s because an Englishman’s home is his castle that we’re renowned globally for our love of property ownership. Or perhaps it’s because we’ve come to regard property as the safest investment for the future. Whatever the reason, it translates to a vast number of mortgages, however the property market may fluctuate.
Serving the nation’s mortgagors (and other would-be borrowers) is a wealth of comparison websites that promise to evaluate the latest mortgages, do the hard sums and save money in a matter of minutes. According to Which?, 79 per cent of people use such online tools, but we’d suggest many of those could benefit from the combination of online tools and face-to-face financial advice, especially when it comes to mortgages. On that point, here’s a few areas to consider:
- Are you really getting value for money? In an excellent piece by ‘advice supermarket’ unbiased.co.uk, ‘value means receiving more than you put in’. With online comparison tools, frequently all that’s needed is the quick input of some black-and-white monetary figures. And the outcome? Similarly black-and-white answers. Results that may well be free-of-charge, but can prompt confusion and often need human explanation. Is this truly great value?
- Despite the overwhelming choice of financial products on comparison sites, not every one will be listed. Financial advisors, by contrast, will have access to a widest range of financial packages, and understand how those packages can be tailored to individual circumstances. They will also know what’s worked for their other clients, so will have a real grasp of value for money – which isn’t always about the cheapest deal – it could be the providers that offer the best customer service.
- For many, a mortgage is the ultimate financial commitment – and remortgaging, along with other financial planning, attracts a similar significance. While online comparison tools undeniably make financial ‘shopping’ quick and convenient, is it wise to take such a casual approach to such major monetary activities? It’s unlikely a bride-to-be would want to choose the dress for her big day without seeing it in person, or conversely, a divorce would proceed without face-to-face solicitor meetings. We believe that making a mortgage choice should be no different: a little online research should be followed by personal advice from an expert.
- You might love the fact that, thanks to comparison sites, you can evaluate endowments from the comfort of your desk, or even mull over mortgages on your mobile, but will that develop real wisdom about the world of mortgages and your financial future? One of the proven and best ways humans learn is from other humans – and it’s no different for tackling even the most complex financial information. Speaking face-to-face with an expert can ensure you really understand the small print, fully appreciate the implications of your decisions and are au fait with the many quirks of the financial and property markets.
- There are many other compelling reasons to consider consulting a financial expert – you can find out about our consultants here – but we believe these are the key points. And we offer them only as food for thought, because we recognise the importance of financial comparison websites. Just remember, mortgages might be better assessed with chinwags as well as mouse clicks!