Three in five borrowers to seek mortgage advice in wake of pandemic

Three in five (60%) borrowers whose financial circumstances have been impacted by the coronavirus pandemic agree it will be important to seek advice when looking to secure their next mortgage, according to new research from Legal & General Mortgage Club.

The club’s findings, based on a survey of more than 1,000 consumers with a mortgage, revealed that a third of households that need to remortgage (35%) have at least one individual who has been financially affected by COVID-19.

Sixty per cent of these borrowers also indicated they will consult an adviser when remortgaging.

Legal & General suggested the high demand for advice is also underpinned by the recent UK Finance data that showed over 700,000 residential fixed rate mortgage products are to mature this year.

The mortgage club’s director, Kevin Roberts, commented: “It’s encouraging that most consumers continue to view independent mortgage advice as a route to securing a great mortgage deal.

“This is crucial given the current challenges many are facing due to a change in circumstances, as working with an adviser could help them find a better suited product than by going it alone.

“With plenty of great value mortgages on offer, borrowers who have seen their incomes impacted by the crisis are even more likely to need an adviser to navigate the wide range of products suited to furloughed applicants.”

Elsewhere, Legal & General’s research suggested there is a need to educate consumers on the importance of protection when securing a mortgage. The study found that just 21% of those who have not seen their income change, as well as 35% of those who have been financially impacted by the crisis, suggested they will consider taking out life insurance when remortgaging.

Furthermore, only one in five (20%) borrowers have critical illness cover while just 11% have income protection.

“Advisers have a clear opportunity to support borrowers, helping them avoid overpaying on their mortgage as well as finding products which cater for their individual needs,” Roberts added.

“Once the borrower has identified the right mortgage, it’s equally important that they protect themselves and their loves ones should the worse happen. The unique circumstances we find ourselves in have presented advisers with a great opportunity to prove their value and by helping customers achieve the best outcomes, they too can benefit.”

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