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AIM: Take advice to save £1,830 per year

Thursday, 22 May 2008 12:07 AM

Taking mortgage advice could save borrowers £1,830 annually compared with going direct to lenders, according to research from the Association of Mortgage Intermediaries (AIM).

The report - Value of Mortgage Advice - was carried out by NMG, and examines the value of mortgage intermediaries to consumers in getting the most suitable product, at the best price, with the best service.

The figure of £1,830 represents the average difference between the cost of a standard variable rate (SVR), most frequently offered by lenders, compared to a fixed rate, the most popular choice by advisers.

"Intermediaries are able to identify the most suitable product for the consumer at a competitive price," said Chris Cummings, director general of the AMI.

"Analysis of consumer attitudes shows they value this advice much higher than that provided by lenders. And in these difficult times it is more important than ever for consumers to access good financial advice," he added.

Further, research also shows of all British adults who arranged their current mortgage via an adviser, more than half (55 per cent) felt that they were kept informed on the progress of the mortgage application.

Yet among those who arranged it through a bank, building society or lender direct the figure drops to only a third (34 per cent).

Again, for those borrowers who experienced financial difficulties between April 1st 2006 and September 31st 2007, 83 per cent were assisted by mortgage intermediaries.

"Consumers can choose to shop around themselves rather than use an intermediary," admitted Mr Cummings.

"However, research shows that half of consumers who purchased a mortgage on a direct basis did so from their own bank or building society without considering any other option.

"A further 39 per cent contacted no more than three lenders.

"This significantly reduces the likelihood of finding the most competitive mortgage for the individual's own circumstances."

Chris O'Toole

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