Protection can help secure later life mortgages

Protection can help secure later life mortgages

An appropriate protection policy will help later life lending clients pass affordability assessments, a lender has told a mortgage seminar.

Speaking at the Mortgage Business Expo in London yesterday (10 October), Keith Barber, director of business development at the Family Building Society, said lenders will undertake assessments to consider eventualities such as one partner dying in a couple that hold a later life mortgage.

He said: "We will take protection into account - so if the applicants have a life policy in place, that will get through the affordability assessment of lenders in the later life lending market."

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Mr Barber said any uncertainty felt within the mortgage sector towards later life lending, by both lenders and brokers, should not discourage either from pursuing the option, comparing it to when buy-to-let products first entered the market.

He said: "Buy-to-let is similar. It was new for a while and scary for some people who did not know how to do it.

"But after a while it become mainstream and it is now part of most broker’s general business streams.

"Later life lending is the same. You should not feel concerned about it as long as you are asking the right questions about needs, circumstance and affordability."

Leading the seminar Danny Belton, head of lender relationships at Legal & General Mortgage Club, said once brokers have understood exactly what customers are looking for in later life lending, none should be turned away.

He said: "We should never be turning away these customers, it is a great opportunity for all of us to maximise and really show we can help all our customers in today’s mortgage environment."

Dean Mirfin, chief product officer at Key Retirement, highlighted the importance of advice in the market, warning of a danger that later life lending is becoming product, rather than customer, led.

To achieve success in a later life market focussed on customer outcome, Mr Mirfin said advisers must not shy away from referrals.

He said: "At Key, we are big believers in referrals and clear mechanisms are needed to identify where customer needs exist.

"When we talk about holistic advice, I am absolutely not an advocate for firms needing to be able to do everything. I am an advocate for working in partnership - otherwise the focus is no longer on the customer."