Mortgage Brokers Give Poor Advice
Professional Negligence
30/07/2008
A consumer group has warned that borrowers are at risk of taking out an unsuitable mortgage, with fewer than one in 10 mortgage intermediaries providing acceptable advice.
Four out of 50 advisers based at banks, estate agents and individual firms visited by Which? Money researchers during a mystery shopping exercise provided adequate advice.
Some 41 intermediaries failed to provide the researchers with at least one piece of key information, while 35 failed to properly check whether the individual could afford to repay their mortgage. Two-thirds tried to sell insurance cover, on which they earn commission, despite the fact that it was often unsuitable, Which? said.
The researchers, who posed as first-time buyers who knew nothing about mortgages, also found that many advisers took a 'one size fits all' approach, without bothering to examine their personal needs in detail.
Martyn Hocking, editor of Which? Money, said: "Listening to people's needs and giving tailored advice should be the bread and butter of a mortgage adviser's job, but too many of the advisers that we visited took a 'one size fits all' approach or seemed as concerned with selling an insurance policy on the side."
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