As the customer transitions through products in later life aligned to their changing needs and circumstances, the need for advice will never be stronger.
Appropriate qualifications may be seen as a barrier to advising older borrowers. But as the need for advice for older borrowers grows, many mortgage advisers may consider equity release qualifications as a natural stepping stone.
To start, CeMap qualified advisers can access products such as Hodge’s 55+ interest-only residential mortgage.
Qualifications such as the certificate in regulated equity release (CeRER), which can be taken if you have achieved CeMAP or other equivalent mortgage advice qualifications, are also available.
And the Chartered Insurance Institute’s certificate in equity release, an ideal next-step for holders of the CII Level 3 certificate in mortgage advice, requires completion of only one further unit.
Undertaking qualifications such as these can open-up solutions for all later life borrowing needs and it is sure customers will seek advice more and more as the sector grows.
For example, a couple in their late 50s both working full time want advice on their lending options into retirement.
Their most pressing concern is that their existing interest-only mortgage matures in five years and they have no firm plan to repay the capital.
Previously, the most likely solution would have been to sell their home, but this isn’t what they want. Downsizing may be a future option but not yet given they are still working.
Equity release may provide an answer, but it is likely they will still want to service monthly interest repayments at this stage, given they still have regular income.
They have not been irresponsible and the original intent had been that rising house prices over the long term would mean they built up sufficient equity to repay the mortgage and downsize, but they are not yet ready to do so.
Are you prepared?
This is set to become an all too common scenario, with tens of thousands of older borrowers expected to be hit by a shortfall of capital against their outstanding mortgage loans or simply not having planned for what comes next.
Are mainstream mortgage advisers prepared for such customers? They should be.
Mortgage advice for older borrowers should no longer be feared and isn’t just restricted to equity release.
Later life lending is at the forefront of product innovation and advisers need to know and understand what is available. Selling their home and downsizing isn’t the only option.
The sector is becoming well supported by major networks and mortgage clubs, which provide an array of training materials and events.
Given such support and the backdrop of advice need and opportunity, there has never been a better time for advisers to consider entering this sector.