More people are turning to the internet to find the right mortgage deal. Will you be one of them?
You can do just about anything on the internet now. Whether it’s booking a holiday, checking to see who’s ringing your doorbell, or sharing the twentieth selfie of the week, no one can deny that we’re living in a digital age. Naturally, the mortgage industry has had to adapt, with a large number of online mortgage brokers having popped up over the past couple of decades.
According to a recent survey by Which, around one in three homeowners secured their mortgage through a broker, with 8% of those using an online service. While that might sound like a small number, the popularity of online mortgage brokers is currently on the rise thanks to more people preferring to get things done from home and the increasing amount of time the population is spending online.
What are they?
A mortgage broker is essentially the middle man between you and the lender. They’re there to find you the right mortgage deal for your situation and can often offer advice on similar areas like insurance and protection.
An online mortgage broker is basically what it says on the tin. It will compare and contrast different mortgage deals on the market, but the process is almost always completely automated. Unlike a traditional broker, there’s no shop front, no face-to-face discussions, and no “handshake” deal as such. The name should be a dead giveaway, with an online mortgage broker negating the need for a real person. While this can put some people off, it can be an excellent solution for those who’d prefer to find the right mortgage without having to leave the comfort of their own home.
Why do people use them?
While many might want to meet an actual person when getting mortgage advice, there are a number of reasons why people prefer to check deals online:
• 24-hour service: Unlike people, the internet doesn’t sleep. For people who work nights or are busy during the day, it can be hard trying to fit in an appointment with a broker, especially if they‘re only open during traditional business hours. Since websites are available 24/7/365, an online service is great for people looking to check mortgage rates on the go or at less sociable times of the day.
• Cost: While this varies from service to service, the same Which? Survey revealed that many people who used an online broker did so because they thought it would save them money. In most cases, you won’t need to pay to see your results, but many do also offer services to take the application further in which case you may need to pay a fee.
• Time-Saving: If you have a fast connection, then an online service usually can show you several deals quite quickly. Many prefer not having to schedule an appointment or travel to a physical office. The website should also allow you to see your mortgage options quicker than a manual search.
• Scope: Like a regular broker, the main draw of an online mortgage broker is the sheer scale of deals you can see. Banks and building societies aren’t going to show or advertise mortgage deals better than their own and often have limited products. The notion of being able to see sometimes hundreds of potential mortgage deals at the click of a few buttons is enticing to many.
• No paperwork: If there’s one thing absolutely no one on the planet enjoys, it’s filling out paperwork. With an online mortgage broker, physical paper is replaced with online forms. Great for some as any mistakes can be corrected with the press of a backspace key and no tipp-ex.
• People: This one’s fairly simple… plenty of us don’t like talking to strangers. The internet has become an excellent tool for those who either get nervous around people or who can be easily pressured by salesman or brokers into taking deals they might not be sure about.
How do they work?
Like any service, the specifics of how they work will vary from company to company, but most online mortgage brokers do generally operate similarly.
No matter the website/service you use, you will need to enter at least a few basic details like your income, age, whether you’re a first-time buyer etc. so it can work out the deals you could be applicable for. While it might not give you the most specific details, it can give you a good idea of the types of deals available to you. Many don’t take it further than this, using an online tool as a starting point and then applying on their own.
Many online mortgage brokers will have the option to take your application further, meaning you’ll have to scan the relevant documents to verify your identity.
While they can be useful generally, if you are looking to apply for a mortgage and have a more complicated situation, an online mortgage broker might not be able to find you the best deal.
When it comes to finding the right mortgage, ultimately, it’s up to you which route you take to securing one. If you’d prefer not to leave your house and like the flexibility of an internet service, then there’s never any harm in having a look at an online mortgage broker. However, everyone’s situation is different, so never limit your options, especially when it comes to a substantial financial decision like this. There are many kinds of mortgage advisers out there, so make sure to take the time to find the right one for you.