Real Homes Reports: banks remain the most popular source of mortgage advice

Real Homes survey reveals most home owners spoke to their bank before taking out a mortgage, although online mortgage advice is becoming more popular too

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Taking out a mortgage is the most important financial decision for a great many of us – after all, the commitment involved will take most of us through our whole working lives. Finding the best mortgage provider and deal is, therefore, a process worthy of thorough research and preparation. How do UK home buyers approach this task, and has the wealth of information now available online changed their mortgage search habits?

A recent Real Homes survey of 681 home owners has asked people what advice they sought before taking out a mortgage on their first home. The results point to a distinct preference for convenience and face-to-face contact, as opposed to lengthy research into every available mortgage deal. 

Nearly 40 per cent of respondents consulted their bank – which is entirely sensible given that for many of us, the banks and building societies that hold our accounts will become our lenders. A further 13 per cent of respondents preferred to rely on their parents' advice, and 5 per cent spoke to friends who are home owners. 

While taking out a mortgage without getting qualified mortgage advice beforehand may reduce the home owner's rights if trying to change the terms of the mortgage at a later point, it is understandable that in the current uncertain socio-economic climate prospective home owners may want to know how their parents' mortgage repayments were affected during comparable periods of uncertainty and/or economic downturn. 

Over 15 per cent of our respondents opted for tailored financial advice which they sought from mortgage brokers or personal financial advisors. As with other types of service providers (notably estate agents), there is some tendency for mortgage advice services to be moving online. Mortgage advice is now offered by consumer advice websites such as Which? and specialised platforms such as Online Mortgage Advisor. These services are very similar to visiting a mortgage broker in person, however, since anyone giving mortgage advice online has to be accredited. 

it's a different story when undertaking independent online research about taking out a mortgage – 17 per cent of our respondents opted to do this before buying their first home. While a mortgage lender, typically the bank, will still have to issue advice, it is possible to reject it and choose a deal based on one's own research, which would mean the mortgage application would be classified as 'execution-only'. While there are clear risks in not getting qualified, accredited financial advice – rejection or taking out the wrong mortgage types are the most obvious examples – it is also clear that dedicated independent online research can be sufficient, and reduce the overall cost of buying a home.

Our own guide to taking out a mortgage is a good place to start your own research, if you want to explore this option