Later Life Lending
FACT: Over £1 trillion of wealth is locked into housing equity for over 55's.
The Freedom and Choice in pension reforms are causing debate amongst industry professionals, politicians and retirees (and those approaching retirement) alike.
You may find that some customers fall outside of the typical high street lending criteria. Later life lending could create opportunities for these customers.
Some later life lenders offer conventional mortgages. Later life lending is not just Equity Release, and by looking at all the available options you can assist your customers whether you are advising in this market or not.
Some customers are becoming increasingly aware of how far their incomes will stretch throughout their retirement and for some of these customers, options to increase their incomes are becoming much more attractive.
Later life lending can offer customers peace of mind. It can help with capital raising opportunities of their choice; whether that’s helping family members onto the housing ladder, purchasing a second property as a BTL or a sum of money to help with their enjoyment in retirement. With relatively quick access to what is potentially a sizable cash amount, later life lending is fast becoming a viable alternative to mainstream option for some customers.
Lending choices have historically been hindered by age restrictions and affordability assessments. However opportunities and product innovation is making later life lending more prominent in the marketplace. We have seen mainstream lenders adapt their later life criteria and increase maximum lending ages. At the same time we have seen specialist later life lenders moving into the standard advice space for advisers, by developing more flexible products for interest only customers.
Legal & General Mortgage Club is aiming to be a leader in this market, offering choice, and support for all our members.
Later Life Lending suitability
- Helping children onto housing ladder.
- An Interest only mortgage, capital repayment date but insufficient funds to pay off the balance owed.
- Want to purchase ‘dream home’ with inheritance but cannot buy outright.
- Want to remortgage remaining mortgage balance to reduce rate and monthly payments.
- Has an income reduction following bereavement / divorce.
- Buying a holiday home.
- Using new pension freedoms to invest in a buy-to-let property.
- Wants to rightsize their property.
- Struggling to meet current mortgage repayments due to illness.
- Home improvements / adaptations.