Clicks and mortar

Rob Davies explains how best to use the Internet to get a good mortgage deal

You’d have thought by now that you could pretty much buy any financial product online, wouldn’t you? But, new research, from user experience design company Foolproof, shows that when it comes to mortgages, consumers are still getting a raw deal.

Foolproof’s Online Shopping Survey that looks at how consumers use the internet to look for and arrange mortgages found that the number of people who wanted to arrange their next mortgage online had doubled in two years from 9% in 2007 to 18% this year. And, when it comes to looking for their next mortgage, 84% intend to use the internet and 8% their mobile phone to access the information online.

Perhaps most telling is that nearly half (45%) said they would expect to go as far as to apply for and buy their mortgage online. But this willingness to try to arrange a mortgage online is not being met by the mortgage industry. Unfortunately for consumers, the mortgage industry has made very little progress in delivering a straightforward and rewarding online user experience.

Tom Wood, founding partner of Foolproof explained:

“The last two years’ economic problems have focused consumers’ minds on the need for better quality information. When it comes to mortgages, consumers are rightly trying to research thoroughly the changed market, product availability and lending conditions but are being hampered by the fact that the mortgage industry has failed to make any noticeable progress in improving its online content and is making it too difficult for consumers to find the information they are looking for.

“Our research highlighted a number of barriers that consumers meet in their quest to find out information on their next mortgage that in most cases defeats them. The industry collectively needs to improve its game dramatically if it hopes to make the online channel more accessible to mortgage shoppers.”

Based on the findings of its research, Foolproof suggests the following tips to readers of yourmortgage.co.uk to help them get the most out of what’s on offer on the web.

Be persistent

Persist with finding a site that offers you a good overview of the market It’s important that you persevere in your efforts to get generic and independent information about mortgages. The mortgage market has changed immensely in the last two years and you need to be up-to-date with the pros and cons of different types of mortgages and repayment methods, the level of deposits needed, help available from government schemes and the eligibility criteria that lenders use. Sites that can prove helpful include Moneysavingsexpert, Moneyfacts, Fool, BBC, FSA, Guardian and The Times.

Be specific

When using a search engine, the more specific you can be about the type of mortgage you are looking for the faster you will get to the relevant information and the less time you will spend narrowing down your search. Terms like ‘cheap mortgages’ are not specific enough. Terms such as ‘three-year fixed rate mortgages’ or ‘first-time buyer mortgages’ will speed up your search.

Check your spelling

Foolproof found that 21% of search terms were mis-spelt. The word ‘mortgage’ was commonly mis-spelt along with lenders names such as Woolwich. And although Google’s predictive text has helped direct consumers to right places it’s better to get it right from the start. There are some sites who aim to return high search engine rankings based on mis-spellings but they are only interested in getting your personal details and selling them to a lender or broker.

Look for helpful tools and calculators

The better sites are now offering you tools that can help you work out how much a mortgage will cost and how much you will be able to borrow. Using these tools will help you to determine what sort of deals you are eligible for and should cut out wasted time looking at deals you don’t qualify for. NatWest offers users easy-to-use calculators to work out affordability and First Direct does well at using interactive content to explain product details.

Be modest

Don’t give away your personal details too soon. Many sites want you to fill in a form with your personal details so that they can contact you with a sales call or pass on your details to a mortgage lender or broker. So only fill out a form with your contact details on if you are sure you want the company to contact you.

Don’t be afraid to use the phone

Foolproof’s research found that many people wished to verify the information they found online about a specific mortgage. Often the best way of doing this is simply to ring the lender and ask. Most have contact numbers clearly displayed on their sites so don’t be afraid to give them a ring.

Use comparison sites

Foolproof’s study discovered that comparison sites have grown their influence in this sector as they are now the most popular type of site to be visited. 81% of people going online to research mortgages expected to visit a comparison site – up 12% from 69% in 2007. Comparison sites are a great place to start getting an idea about the best deals around. You can rank the mortgages that are currently on offer according to their initial rate, total cost, fees, loan-to-value ratios (LTVs). If you like a specific mortgage deal and want to proceed most comparison sites will then link you through to the lender’s site but a handful will ask you to submit your details on a form. Moneysupermarket was the most popular comparison site used in Foolproof’s research and is good at providing users with results in the format they require.