Mortgage brokers need to be clear on the service they provide and the value they bring when negotiating deals, so customers can see the breadth of offering they provide compared with their banking rivals.
A survey from Legal and General (L&G) Mortgage Club found that 55 per cent of consumers are unaware that a mortgage broker can offer greater product choice than a bank or building society.
Additionally, almost a fifth (19 per cent) thought brokers and banks had access to the same products. This is despite there being 3,721 products available to consumers who go direct, compared to 29,886 for those who use a broker.
In response to the L&G Mortgage Myths survey, David Hollingworth, director of communications at London and Country Mortgages, said an increase in regulatory rules has driven more people to seek brokers.
However, firms need to continue “banging the drum” about the work they can do for clients.
Mr Hollingworth said: “There’s a growing understanding that by doing a lot more shopping around you can find reasonable disparity between products. Online comparison has helped [shape that thinking], but with mortgages it is still a big decision for some people.
“The lending criteria has also been a driver for people to use brokers. The tightening criteria means borrowers are more aware that it is not quite so straightforward to get a mortgage.”
The L&G study also revealed that nearly half (48 per cent) of homeowners and those looking to buy who did not use a broker, chose not to because they felt their bank or building society offered them a good deal.
Some 15 per cent thought that they would get a cheaper mortgage going direct and almost one in five (19 per cent) consumers "didn’t see the value" a broker would add.
Beyond the sale of the product, Mr Hollingworth added mortgage brokers can continue to show how important they are, by staying in touch with the customer after the mortgage deal has been done; providing information about changes in the market.
One in seven (14 per cent) thought their bank or building society would be able to give them access to the same impartial advice as a mortgage broker.
Less than half of respondents (44 per cent) correctly identified that a mortgage broker represents the interests of the borrower, while more than a quarter (29 per cent) thought brokers represented the interests of the lender.
Ima Jackson-Obot is a features writer of Financial Adviser
