Later Life Lending

 

Older borrowers are discriminated against by many lenders, but the tide is turning slowly.

The financial services industry is playing an increasingly central, and essential, role in retirement security. Growing numbers of older people face ongoing decisions about how to manage their income and assets over a longer period than previous generations, this presents both opportunity, and challenge, for the later life lending sector.

There is an ever-increasing demand for a broad range of retirement borrowing products. With the average life expectancy having risen considerably and mortgage lending requirements extending well into borrowers’ 60s and 70s, borrowers needing a mortgage into retirement are often routinely turned down by mortgage lenders on the basis of their age alone. This approach means over 50s needing to remortgage can find it difficult to secure a home loan.

There are many reasons why individuals may need to borrow later in life, from home improvements to helping children get on the property ladder.

As stated in the publication Mortgage Strategy:

‘With changing trends in home buying seeing people going through the home buying cycle later in life than a few decades ago, the retirement lending market is embarking on a period of unprecedented growth’

In a survey of intermediaries by Marsden Building Society, receiving a ‘personal approach’ from all sides was of key importance to clients.

Intermediaries were ‘adamant’ there was a need for a more personal approach to underwriting when looking at older borrowers, and it’s not always straightforward placing a later life lending case because criteria could change significantly from lender to lender.

Using a broker can be a great way of finding a lender who will consider your application – a broker will know which lenders are happy to lend to certain demographic groups.

It’s important to seek independent legal advice before taking an equity release or home reversion product in order to understand the impact any plan will have on inheritance tax planning.

Jim Boyd, chief executive of the Equity Release Council, agreed that “advice is everything”

Henry Knight, Managing Director at Springtide Capital comments:

“In an ageing population, we recognise the importance of providing specialised advice for those looking for a mortgage later in life. Later Life Lending can help a variety of client needs such as: repaying debts and mortgage, supplementing retirement income, home improvements or providing financial assistance to your family. We deliver solutions tailored to your personal situation and advise on Equity Release schemes such as Lifetime and Interest only mortgages”

To understand the features and risks of a Lifetime mortgage, speak to one of our qualified specialists about providing you with a personalised illustration.

To speak to us today, call Springtide Capital on 020 3040 4400 to book an appointment with a mortgage consultant. 

Sources:

https://www.yourmortgage.co.uk/remortgage/age-against-the-machine/

https://www.financialreporter.co.uk/later-life/fse-midlands-advisers-warned-over-retirement-interest-only-recommendations.html

https://www.mortgagefinancegazette.com/lending-news/equity-release/call-individual-approach-later-life-lending-25-09-2018/

https://www.mortgagefinancegazette.com/lending-news/whats-important-later-life-clients-05-09-2018/

https://www.mortgagestrategy.co.uk/borrowers-options-beyond-65th/