Andy Knee, chief executive of Legal Marketing Services, a UK provider of outsourced property services, says, “For a number of years, many have anticipated a rise in the number of mortgages being completed online. This has failed to materialise to the amount expected since even those with a great deal of understanding still want the reassurance and advice available to them for the final stages of the process.”
While practical in theory, the option of purchasing a mortgage online for the sake of convenience may be more difficult than a customer imagines. Lender websites may not be straightforward enough for the average borrower to fully understand, which may require them to eventually seek help from an adviser to ensure they are purchasing the mortgage product in the correct manner.
Daniel Bailey of Derbyshire-based Middleton Finance says, “At the moment I do not see an appetite from consumers to buy a mortgage over the internet. Lenders’ websites are not user-friendly enough for borrowers to feel confident enough to carry out what is most likely one of their biggest financial decisions.
“There is so much information that needs to be clear and concise for the borrower to understand. Most borrowers I see, even the younger ones who have grown up with the internet, find themselves overloaded with all the information and then seek advice.”
The AMI requires precise record-keeping surrounding execution-only mortgages. The firm must make and maintain a record of the information provided by the customer about their chosen product, the information must be in a durable medium, include confirmation from the customer that they have positively opted for an execution-only sale, and any advice from the firm that the customer rejected, including why it was rejected. The record is required to be maintained for a minimum of three years.
Impact of the MMR
Included in the sweeping changes to the way mortgages are bought and sold introduced in the MMR, lenders are now required to go through an extensive process to assess the affordability of the mortgage and to verify the customer’s income.
Under MMR, the borrower must receive advice where there is any kind of interaction involved in taking out a mortgage. This has created a challenge to lenders, as many previously only offered information on their own range of products. An adviser, on the other hand, can offer help with mortgage products from a variety of different lenders.
