It appears to be a widely-held view that one of our biggest financial commitments in life, if not THE biggest, is the mortgage we take on to buy our home. And though it is vital for someone to take advice on such a major expense, why can you still be left feeling confused AFTER having sought mortgage advice?
Well, before giving the very simple answer to this question, let's briefly consider what "advising" means and if that matches our everyday experience.
According to the Collins English Dictionary, the word "advise" comes from the latin words "visere" and "videre" which, respectively, mean "to view" and "to see". So, when someone is advising you or me, their primary objective should be to give us a "view" into the subject we are unclear about. They should be helping us "to see" more easily what we struggled to see before. These definitions of advising rather remind me of the 1970s pop-classic by Ken Boothe that chorused "I can see clearly now the rain has gone. I can see all obstacles in my way".
But how exactly can this happen? What precisely can an adviser do, and in this specific instance what can a Mortgage Adviser do, to give someone a clearer view into their potential mortgage commitment?
TEACH.
"What, is that it ... teach ?" you may ask.
Yes. That's it. We have found from our own experience that clients make more confident decisions when we first teach them about mortgages. One key question that we ask consumers very early on is:
"Do you know the different types of mortgage payment methods?"
We are not surprised when consumers then tell us about things such as Fixed-Rate mortgages, Offset mortgages, Tracker, Discounted and Variable-Rate mortgages. However, When we help them to understand that it's actually far simpler than that and, in reality, there are only TWO mortgage payment methods ("Capital and Interest" and "Interest Only"), they do appear to be genuinely surprised. Careful listening and teaching, leads to understanding. This, in turn, leads to confidence in both the advice and the adviser, which finally leads to a more strongly informed decision and, hopefully, the adviser winning your business.
Listen. Teach. Understand. Confidence. Business. It's a potential Win-Win process for both you as a consumer and the Mortgage Adviser.
As a prospective "mortgagor" (i.e. someone with a mortgage), you will have reduced the potential for problems with your mortgage if your adviser takes the time to teach you the rights and responsibilities of being a mortgage holder ... AND you take the time to understand. Funnily enough, this is directly in line with the Number 1 principle of the "Treating Customers Fairly" programme that the Financial Services Authority (FSA) have laid out for all mortgage advisory firms to abide by. This principle states that "consumers are to be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture". Now tell me:
How much "fairer" can you get than a business that goes all out to demystify mortgages first, then ensures that you understand as much as possible about mortgages next, and then finally seeks to win your business?
"But how long will all of this take?" you may wonder. "It seems very time-consuming."
Yes it does seem time-consuming and we can only speak from our own experience as every prospective client is very much an individual. However, we have been pleasantly surprised at just how confident and reassured a client becomes about their potential mortgage commitments after just 20 minutes of being guided through the mortgage maze.
Surely, your biggest financial commitment is worth spending an extra 20 minutes on with a knowledgeable Mortgage Adviser isn't it?
So, if you want a simple, easy-to-take, approach of reducing problems that may arise with a mortgage, then get your Mortgage Adviser to take the time to teach you about mortgages first. Then you stand a far greater chance of understanding if the mortgage solution
that they are advising and recommending is the one for you.
