What can advisors do about affordability issues?

January 4, 2024 by Mark

Brokers

Affordability is a word on everybody’s lips right now, thanks to rises in the costs of everyday items. It is an even more acute issue for those who want to buy a home or who already have a mortgage, so is it possible that advisors can use their knowledge from their CeMAP training course to help?

One step that they can take is to research the specialist lending market, if they do not already have contacts within it, to find lenders more able to help those who cannot afford a mortgage from a high street lender. There is nothing shameful about turning to a specialist mortgage provider: they exist to support people frozen out of the mainstream market and can offer a route to buying a home.

The second half of the affordability equation is those who already have a mortgage but who are struggling to maintain payments on it in the midst of rising living costs and rates. A big problem when it comes to clients in this situation is they can be embarrassed about admitting financial difficulties and seeking help.

Advisors should aim to reassure their clients and provide an environment that is both non-judgemental and safe, to encourage them to open up. They can also potentially act as a go-between, informing the lender of the situation and negotiating a way for the mortgage to be paid off that the client can afford. The more information an advisor is able to glean about the circumstances of the client the better, so a full and frank discussion is essential.