Are Mortgage Comparison sites all they are cracked up to be?
Well, according to recent research carried out for the Sunday Times* the answer is an emphatic “NO!”
This is something that professional Mortgage Brokers have been telling clients for many years now, but research is finally out there showing that of 11,000 borrowers using comparison sites just 385 or a paltry 3.5%, would actually qualify for the mortgages that they are shown. The majority of comparison websites will use a very basic calculator that takes simple information such as the expected property value, the deposit available and the term of the mortgage and the earned income. They then spew out a list of deals that fit this very basic criteria.
If a prospective home buyer were to use such comparison tools and treat the outcome as gospel, they could be in for a nasty surprise when booking a mortgage appointment with their bank or building society. The majority of the comparison sites do not include such vital information as personal loans, credit cards, gym memberships, credit profile amongst a multitude of other considerations. Once these are factored into the equation at Decision in Principle stage many prospective homebuyers will either be offered a smaller loan than they require or in the more drastic cases, declined altogether!
When you sit down with your mortgage broker, a professional broker will initially assess your circumstances by collating all the documentation that a lender will look at. At Abode Mortgages we also insist that a new client will send their full Check my File credit report (this report covers the four main credit reference agencies lenders use) to us prior to a meeting so we can be certain we understand any historical credit issues a client may have.
This will allow us to help manage a clients expectations as to what they can and cannot achieve with their prospective home purchase. It is much better for the clients peace of mind to know from the outset if they can afford their dream home, or if they will have to potentially wait a bit longer.