Issue n. 5 | January2016
LIFETIME MORTGAGE INSIGHT B r o u g h t t o y o u b y T h e P r e m i e r E q u i t y R e l e a s e C l u b 0 8 0 0 61 2 5 4 2 3
The porting process explained...
Could a ‘two phase’ retirement solution become the new norm?
By Rachel Pease, Pure Retirement
By Nick Brown, Just Retirement
Page. 3
Page. 5
25th Anniversary of the self imposed control By Jane Hanlon, The Premier Equity Release Club
The 25 th Anniversary of the self imposed control, originally under SHIP and now the Equity Release Council has shown self regulation working and driving up standards to meet with consumer demand. New schemes have improved flexibility beyond expectations. Lifetime does not have to be lifetime as changing lifetime events dictate the products need to be flexible, and the lenders have listened to consumers’ demands. So the question “Have you reviewed your paperwork?” Is it in line for the modern features of lifetime mortgages, does it record medical in detail, state priorities and can it identify possible change of events in the future? With current mortgage regulation in the residential sector experiencing issues on affordability, more older clients will be turning to lifetime to solve their mortgage requirements. Great news for equity release advisers, however these clients will require more than a lifetime mortgage in the true sense. So it is crucial that the adviser listens to the clients, records overview opinions and raises issues that may give cause for concern in the future. These have to be recorded with discussion notes and responses from the clients as to what options they may consider; a MUST that will help with advice and your recommendation.
• Can I purchase? – Yes, subject to lenders criteria • Can I move? – Yes, porting mortgages subject to loan amount within lender LTVs. Problems: Debt too large to transfer or partial repayment required and property has to be acceptable to lender (CARE with age restrictive property. However, porting can cut out the adviser as the borrower goes directly back to lender. It is worth noting that this may not be the best option and a whole financial review may be a better option involving financial advice. • Can I repay? – Under the Council rules there are no redemption penalties on death or long term care of the survivor, otherwise you may incur redemption penalties. Continued on page 2 >
Common issues that arise:
7 year gilt rate at 7th Jan 2016 = 2.14% Rate supplied by Just Retirement
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