While advisers will naturally be familiar with many of the common offer conditions that follow an equity release application, there are some unexpected nuances or unusual conditions that can throw a proverbial spoke in the wheels of the process.
Failure to prepare for this can be extremely costly for both adviser and client, either causing inconvenient holdups or potentially derailing the application all together.
Preparation key or average time scale could double
Dealing with such conditions effectively and efficiently is best achieved by preparation, so clients can have the necessary documentation ready to submit to solicitors or the lender.
Indeed, five minutes of foresight spent reviewing lender resources and factsheets can cut days of delays, allowing applications to run smoothly as obstacles are overcome in advance.
For example, how many clients would think to note that they have a septic tank on the property? If so, their solicitor will need to confirm several details with the equity release lender, including evidence of draining, installation and servicing compliance.
Advisers should therefore gather such documentation ahead of time at the initial customer appointment and send it in alongside the application.
If unprepared, advisers and clients could face an average timescale from offer to completion of 47 days – more than twice that of the more common cases where the only offer condition is a repayment of any existing charge on completion, which usually take only 22 days to complete.
Prepare for property proof problems
As the world grows more conscious of its carbon footprint, more homeowners are opting to install solar panels onto their property which can also trigger unexpected offer conditions. Just as with the septic tank, if there are solar panels on the property then relevant documentation needs to be provided to the lender, in this case proof of ownership. Some homeowners may own the solar panels outright, while for others they may be leased, but either way proof of this must be provided.
Ultimately, these delays can be easily avoided with sufficient preparation, meaning advisers are able to anticipate offer conditions before they are mandated. There is a wealth of educational resources available in the sector from advisers, industry bodies and lenders allowing advisers to access necessary support.
Taking some time to become familiar with both the most common offer conditions, the unusual ones and some of the often unexpected nuances can pay real dividends. Especially as in this fast-moving market, you do not want to exceed the offer period and see the guaranteed interest rate lapse as you may well find that your client loses out.
By being two steps ahead, advisers can not only ensure that their client is happy but have more time to spend on new business rather than managing admin.
