Make your lifetime mortgage business a success
We spoke to Steve Kibler, a successful adviser at Penvest with a wealth of experience in equity release. He ensures that property wealth forms a key part of financial planning conversations with clients. Steve shares his top tips for spotting new opportunities in the lifetime mortgage market.
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Making your lifetime mortgage business a success PDF size: 701KB
Why did you want to specialise in equity release?
"I've been advising on pensions, investments and equity release for over 15 years, but wanted to focus on what I enjoy. There’s huge potential in the growing lifetime mortgage market, so that is where I’ve focused for the last year.
My experience as an IFA helps me take a more holistic approach to people’s finances in retirement. Having an open discussion with clients builds your credibility. And being brave enough to say “these are your options, these aren’t” achieves the best outcome for us both. This will sometimes mean turning business away. If I don’t believe a lifetime mortgage is the right solution for a client, I’ll tell them."
How are your clients using the money released from their homes?
"Lifetime mortgages can be used to help clients in a number of different circumstances:
Some of my clients are still working into their 70s. They have interest-only mortgages with no repayment vehicle. Often by this age, their income is not enough to support a product bridge. If the Loan to Value on a lifetime mortgage fits, they can use the money released to repay their outstanding balance and avoid a repossession.
Helping younger generations
Many of my clients want to give money to their grandchildren. And if they have a large estate, the benefits of doing this could be twofold. Current legislation states that if the value of your estate exceeds the threshold when you die, you may be liable to pay inheritance tax. If grandparents choose to gift money to their loved ones earlier in life, this could bring the value of their estate below the threshold. My clients have used a lifetime mortgage to help pay for key life moments, including helping provide a deposit for a first home or paying for a wedding.
It’s important to make clients aware that if they gift the money away, the recipient may have to pay inheritance tax in the future.
Care at home
My clients have also used lifetime mortgages to pay for domiciliary care. Keeping someone in the home they love, and the property in the family for longer can make a big difference. People aged over 50 have a much greater sense of belonging to their neighbourhood than younger generations – and this only increases with age.
Can you think of any other scenarios where a lifetime mortgage could help?
Engaging with potential buy-to-let investors is one avenue to explore. These investors may not all fit the age criteria for a lifetime mortgage, but may have parents that do. If they’re looking for the capital to invest in a buy-to-let property, they could turn to older relatives for help. The money released from a home with a lifetime mortgage is tax-free. This is another way clients could help their family at an earlier life stage."
How do you generate leads for your business?
"The best source of leads is referrals. I work with mortgage advisers who often refer clients with an interest-only mortgage maturing, or people looking to raise a deposit for first-time buyers. I also work with will writers and estate planners to set up Trusts and Powers of Attorney – both important factors that could affect the client’s ability to borrow against their home.
Hosting seminars that educate prospective clients on products has also been a success. It’s great to help people identify how they can put their wealth to good use. They may have spent many years building capital, but given little thought to how it could help them today."
What’s next for you and your firm?
"I’d like to grow a team of equity release specialists for the firm. I’ve also recently taken my long-term care qualification. Being able to offer clients tailored advice and support during their later lives will ensure they receive the appropriate care they need."