Having chosen a career within the financial services, and in particular the mortgage field, one of the areas that you learn about during your CeMAP training is the field of equity release. It will be dependent on your chosen employer as to whether or not they provide this lending option.
There are number of instances when an equity release plan may be an appropriate route to take. They are available to homeowners over the age of 55 who are looking to obtain a cash lump sum, supplement their retirement income or both.
With the increased regulation that all lenders now adhere to following the Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review (MMR) in April 2014, most lenders are reluctant to approve residential mortgages that would take the applicant past the state retirement age of 65, though some may extend to age 70 or 75 years upon proof of pension or the like being provided.
It is this last point that may lead to some people seeking the equity release route. It means that the homeowner is able to maintain their retirement without having to move home, leaving their carefully built memories to downsize, by providing some much needed monies.
What the customer needs to know
Generally, equity release plans do not have a set term, as the agreement is that they run until the borrower either dies or has to move into a long-term care facility. At these points, the property would be sold and the debt repaid, along with all any interest due. As there is no way of accurately predicting how long it will last for, the borrower is informed of the interest rate that will be charged, but the total amount repayable is dependent on the duration of the loan.
Equity Release plans are available to those who own their property outright, and some lenders will have a minimum loan that can be applied for, but it may be a possibility that the money can be drawn down in stages, which would be particularly useful if it was needed to supplement an income.
As a mortgage advisor, when discussing equity release as a potential option it is important to make the customer aware of the potential implications they may face. Local authority benefit entitlement may be affected, meaning that customers should always check this and consider any potential impact of their decisions before committing to an equity release agreement.