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'Mediocre' mortgage advisors slammed

Jaimie Kanwar

A huge number of mortgage advisers are doing a bad job and are putting buyers at risk, it has been claimed.

According to Which? Money, most advisors seem to be more interested in selling insurance, even if their customers don't need it.

The consumer group sent "mystery shopper" researchers into 50 banks, estate agents and individual firms, posing as first-time buyers who knew nothing about home loans. It found that less than one in 10 advisers gave out adequate information.

Some 41 of them failed to provide at least one piece of key information, while 35 failed to check properly whether the individual could afford the repayments.

Banks were particularly likely to try to sell insurance, with one adviser concentrating more on this than on advising about the mortgage.

One dismissed the key facts document giving details on a mortgage and which they are required to show customers by the Financial Services Authority, saying: "A lot of the stuff in there is just blah, blah, blah".

Another dismissed the idea that interest rates might fall again when recommending a fixed-rate deal, despite the fact that they were cut just weeks later.

A third adviser even tried to use Kylie Minogue's breast cancer to persuade a researcher to buy critical illness cover.

The findings come less than two months after Sky News uncovered evidence that some mortgage brokers have been misleading lenders and arranging loans they know borrowers can't afford.

Martyn Hocking, editor of Which? Money, said: "Listening to people's needs and giving tailored advice should be the bread and butter of a mortgage adviser's job.

"But too many of the advisers that we visited took a 'one size fits all' approach or seemed as concerned with selling an insurance policy on the side.

"With mortgage costs soaring and the spectre of negative equity returning to the property market, it's important that people get help to find the right deal."