There are three types of telephone mortgage operation. There are the services offered by building societies and banks, such as Abbey National Direct and Nationwide Direct, which offer the same range of mortgage products over the telephone as through their branches.
Secondly, there are independent or separate subsidiaries of lenders which run telephone mortgage services, such as Bradford & Bingley Mortgages Direct, Direct Line, First Direct and Bank of Scotland Mortgages Direct. The range of mortgages offered by these lenders is available only over the telephone.
To apply for a mortgage, you simply call up the telephone service and give a few details about yourself, such as your age and income. In many cases, a provisional offer is made there and then, over the telephone. If you know how much you want to borrow, the lender will be able to work out what the monthly repayments would be.
Often the call is free, or charged at local rates, and many telephone lines are open in the evenings and at weekends.
The more information you have to hand, the quicker and easier it is for the telephone operator to assess whether a provisional offer can be made. Some mortgage-lending services have their operators complete a mortgage application form for you over the telephone, so you may need to give precise details. The form will then be sent to you to check, sign and return.
Some lenders will want to know about your monthly expenses as well as your income, so it is a good idea to have this information ready too, says Jenny Whittaker, mortgage manager at Direct Line.
"Our trained staff can discuss the customer's requirements and give a quote over the telephone. On average the call takes 20 minutes. To make the call a bit easier for the customer, they should make a note of their outgoings, loans and credit cards. This makes the application flow more quickly," she points out.
Other lenders, such as Bank of Scotland Mortgages Direct, will run through the mortgage application details with you over the telephone, but they then send an application form for you to complete yourself. This, they argue, gives the mortgage applicant time to sit down and fill in the form with exact details of, for example, length of service with an employer.
Self-employed customers are usually required to provide three years' worth of audited accounts to verify their income.
Shopping around for the best deals is always advisable, as rates vary considerably between lenders. The range of mortgages available may be limited, with some lenders offering only repayment mortgages over the phone. Other lenders offer a range of mortgages, including fixed and discounted offers.
The third type of telephone service is run by companies such as FirstMortgage, which offers mortgages from a range of lenders. The company uses a panel of 12 lenders, so that it is able to offer the full range of mortgage deals on the market, such as cash-back or fixed-rate mortgages. It can also compare similar deals from lenders and pick out the best one, such as the lender that offers the best discount package.
Callers speak to an operator who helps them choose the best mortgage for their needs. An application form is completed over the telephone, and once the customer has checked the details are correct and has signed and sent back the form to FirstMortgage, their application is forwarded to the lender. The service costs pounds 295nReuse content