18 May 2012

Social network mortgage guru?

I paid particular interest this week to a conversation occurring on Facebook.  The superb Horsham page (linked with visithorsham.co.uk) attracts over 8,000 followers who are frequently updated on requests from individuals seeking assistance or recommendations.

One such request was from an individual looking to update their mortgage and what should they do next.  There were some great recommendations of past experiences with some great local companies (thankfully including AToM!), but then there was a phrase that always scares me - use a comparison website…..

These are everywhere as we know, and they can be good for basic research, but they have a few major flaws.  Firstly, not every lender subscribes to them, so you could be missing out on some products more suited to fit your personal requirements.  Secondly, they cannot plan ahead for your specific future requirements or needs.  What if you want to move in a couple of years or are expecting some additional monies in the future that you will want to use to pay off your mortgage.  Thirdly, they certainly won’t help you with deciphering the plethora of information a lender will bombard you with, or check the mortgage offer for you or, indeed, advise you on the criteria the lender uses to decide if you fit their requirements!  As we’ve seen recently, lenders are finding every way possible to increase rates with some hiking their standard variable rates to existing customers.  Finally, they won’t explain to you that if you’re stretching yourself on this mortgage (they won’t offer you a budget planner review) and bank base rate rises in a year or two’s time, you may not be able to afford it. At this stage, best advice would be to look for something more within your financial reach.

Professional and qualified advisers have access to so much more information and have to stand behind the advice they give. Will you be able to sue your 'social network adviser’ if the advice they give turns out to be faulty or if the comparison site misses some vital information!  I doubt it, so play safe, take advice from the professionals with industry qualifications to back up their recommendations and advice. This advice will only be given after a full and thorough examination of your needs, requirements and circumstances.

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