In our undercover probe, we checked 50 mortgage advisers and found 41 failed to provide one or more pieces of key information, while 35 didn’t do a proper check to ensure we could afford to repay the mortgage.
Two thirds also tried to sell us insurance at the same time – often for an unsuitable product – and many failed to tailor their advice to our needs.
In fact, just four out of the 50 advisers passed the Which? Money test.
No type of adviser gave significantly better advice, although three out of the four that passed the test were independent. The fourth was an Alliance & Leicester adviser.
Which? Money’s undercover researchers visited banks, estate agents and independent mortgage advisers across England and Scotland posing as first-time buyers who wanted advice and a recommendation.
All advisers should provide and explain all documentation required of them by mortgage industry regulations.
They should also thoroughly check whether the buyer can afford the mortgage, fully explain the different deals and repayment methods available, and advise which was most suitable.
But we caught one adviser dismissing the mandatory ‘key facts’ document, and another dismissing the idea that interest rates might fall – just a few weeks before the Bank of England cut them.
Another tried to use Kylie Minogue’s recent breast cancer diagnosis to persuade the researcher to buy critical illness cover.
Which? Money editor Martyn Hocking 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.
‘With mortgage costs soaring and the spectre of negative equity returning to the property market, it’s important that people get help to find the right deal.
‘There are still more than 3,000 mortgage deals out there, and the difference in cost can be thousands of pounds a year, so it’s vital people do their homework and choose their adviser with care.’