UK borrowers who have been affected financially as a result of the Covid-19 pandemic are likely to seek mortgage advice in the future, according to Legal & General Mortgage Club.
Indeed, its latest research revealed that some 60% of borrowers who have seen a change in their financial circumstances and 50% of those who have not say they feel it will be important for them to seek advice ahead of taking out their next mortgage.
Additionally, 60% of all borrowers who took part in the research indicated that they would consult an adviser before remortgaging, presenting a growing post-pandemic opportunity for intermediaries to help borrowers.
In addition, over 700,000 residential fixed rate mortgage products are due to mature this year, according to the latest UK Finance data.
Legal & General Mortgage Club director Kevin Roberts said: “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 and those who have accessed payment deferrals with cutting edge tools like SmartrFit offering a quick and efficient way for advisers to access the most suitable products.
“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. And, once the borrower has identified the right mortgage, it’s equally important that they protect themselves and their loved 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.”
Some 35% of respondents revealed that at least one member of their household has suffered financially as a result of the pandemic, underscoring the importance of understanding how different mortgage products can support their needs in the post-pandemic era.
The research also suggested that advisers need to educate consumers on the importance of protection when securing a mortgage, with just 21% of those whose income remains unchanged and 35% of those who have been impacted saying they would consider taking out life insurance when remortgaging.
In addition, just 20% of borrowers are currently covered for critical illness and just 11% have income protection. Legal & General has now developed a practical mortgage review checklist and a virtual workshop to help advisers support their clients in changing situations where extra protection may be needed.