Lifetime mortgages
If you or your firm provide advice on lifetime mortgages that constitute a small percentage of your business, make sure that you read our recent publication on Lifetime Mortgages - firms carrying out low volumes of business.
This highlights concerns from work we carried out during 2006 which indicated that firms writing low volumes of lifetime mortgages in relation to their total business, in some cases, failed to meet the required standards. If you advise on lifetime mortgages, make sure you inform your client about:
- all the implications of entering into a lifetime mortgage, including any impact on their future plans and needs;
- any impact it may have on their entitlement to means-tested benefits;
- any impact on the client's tax position;
- Is the size of any proposed 'rainy day' fund reasonable for your client's circumstances; and
- does your client appreciate the financial implications and risks of borrowing money to invest and/or place on deposit?
Where the client is releasing equity for home improvements, have you considered the availability of local authority or other grants/loans?
We have issued a lifetime mortgages good practice guide. If you have doubts about remaining active in the market you may refer clients to a suitably qualified and competent firm, including on a commission/fees sharing basis.
Also, please refer to our press release Lifetime Mortgage Sales and Advice: Improvements made, but further to go.