Enhanced lifetime mortgage provider More 2 Life is revamping its approach to underwriting ahead of an anticipated surge in sales in the coming months.
The equity release lender said it has been providing brokers with a simplified approach to underwriting clients using a short ‘Yes/No’ question “designed to quickly ascertain a client’s eligibility for an enhancement to their loan-to-value”.
The new approach will offer a tailored quotation using the same health questionnaire. More 2 Life said the change lead to an improvement in rates for those aged 75 and over.
Dave Harris, More 2 Life’s managing director, said: “Our new underwriting approach will mean we can offer a more bespoke service to brokers and their clients, with a focus on an older age profile where we will offer very competitive interest rates and cash back deals.
“The Budget announcements earlier this year and proposed changes to pension legislation will, in our opinion, open up new market opportunities for brokers as equity release increasingly becomes part of a more holistic approach to retirement planning.
“Beyond the borders of equity release, we see huge potential in the growth of the ‘retirement lending’ market, as retirees increasingly look at other lending solutions – buy-to-let and secured lending, for example – as a way of complementing their retirement financial plan.”
Mr Harris said that as many as 60 per cent of people reaching retirement age and buying annuities today could qualify for an enhancement based on their medical history and lifestyle.
“Currently, only about 10 per cent of the equity release market is enhanced so this demonstrates the room for growth in this area and we intend to build on our strength and expertise to help grow the market further.”
The lender has produced new support items for brokers, including a sales aid showing that a standard LTV for a healthy client of £61,200 on a house valued at £170,000 rises to £76,670 for a client categorised as obese with high blood pressure and diabetes – an increase of 25 per cent.
More 2 Life’s enhanced plan is available to clients aged 65 and over. It also offers an ‘interest choice’ plan, for those clients considering refinancing an existing interest-only mortgage, and a ‘protected plan’ designed to help preserve an inheritance for a client’s beneficiaries.
