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Episodes For Advisors Episodes For The Public Equity Release

Equity Release Calculator

Huge Disclaimer: The following transcript was generated by a machine. It’s not perfect. It’s definately best to listen to the audio version!

Alex Curtis  0:03  

Hello, and welcome back to the equity release podcast and today we’re talking about equity release calculators and I’ve got a fee on haggis with me today. How you doing? Very well. Thank you. I am very well, I’m very well. So would you be able to just introduce yourself and just tell us a little bit about what you do?

Ffion Haggas  0:22  

Yes, of course. So, my name is FFion, as you’ve just said, I started the company bots for brokers, because he used to work for the Halifax in mortgage processing. So I’ve always been a bit of that he and I but I didn’t know it really a lot about finances even though I’m a whole no home owner. I didn’t realise how little people knew about the mortgage process until I went to it for the Halifax and I just fascinating because I thought it’s such an essential thing to know how our income works together, and how everything that we do affects what kind of mortgage we can get. So I left my job. So it’s really interesting. I was thinking about becoming a broker, then unfortunately, my department closed. So I just I’ve always been a bit of a geek. And I was into doing chatbots. And I thought, you know, what, my, my love for technology, and this sort of idea that people could do the sort of an easy way to understand the mortgage process. So it led me to, to develop the bots, which a chatbot is basically an automated messaging service. So it’s a way for people to find out information before they actually speak to an advisor, which is what a lot of people want to do. And also, if you try and understand finances, most often, you’ll go onto a website, you’ll be reading information, and it might say, if you’re this, then this applies to you. And if you’re that, that applies to you, and it can be really confusing. So the idea with the bots is you can you can put your information in and then instead of being if you This if you’re that it can say, Well, you’ve told me you’re there. So this is the information you need to know. So, that’s that’s how I started developing my business. And then in October, I got into working with with a broker who does equity release. Now he was in a in a group with me, and I could see he was advertising and he was getting so much abuse on his Facebook ads, some people, this is a scam. We don’t, you know, our mother, she’s lost thousands of pounds from you know, 1990s and I really wanted to help this guy because I knew he was a nice guy. So I thought, well, hang on. I know that my sort of thought process at the time was actually really nice. I’ve got my dad’s words in my head. You know, don’t touch it with a bargepole. It’s a scam. It’s a con, but I thought this guy’s a nice guy. He wouldn’t be scamming people. So I got talking to him and I had realised after doing some research, what how good the product is. So it’s not for everybody. But it’s certainly not a scam. It’s not to rip people off. It’s not It’s not like going to lose your house. It’s not like the, the home reversion schemes back in the 1980s. So and I think it’s I don’t know, whether it’s because I’m a bit of a say this I had sort of, it’s because it gets a lot of hate, I kind of thought, you know, I want to, I want to kind of help to sort of change this perception. So, so since then I’ve been developing some equity release spots, because it is such a complicated area. I want to help to simplify it and show people what their options are. Because if you’re if your related life borrower equity release isn’t your only option anymore, it’s one option and it’s one option that you may consider, but there are other options as well. So, but as we know financial information is can be quite tricky to understand, especially You know, if you if you’re the layman, so my sort of mission now is to help educate people about equity release and to show them, you know, it could work for them and, and don’t, you know, don’t let them get put off.

Alex Curtis  4:14  

Absolutely. And I think one of the reasons why I wanted to do this particular episode was to kind of let the consumers know who were in the market for actually released that. There are some calculators there that are not calculators, we’ll talk about that. And we had one of the brokers on and we had a case study where a calculator couldn’t work that out, I’ll give the solution. I think he had to work outside the box quite a lot. So we want to so we’re kind of on the same page that we think people should be able to help people understand and give a bit of guidance, but I think also at the end of the day, people need to be aware that a calculator is not always going to give you the exact result. You do need to speak to broker as well. But I think one thing you said people don’t want to speak to someone until they’ve got a bit of info first. So it’s kind of that balance of bridging that gap, isn’t it of making sure there’s enough info, it’s not misleading. And we’re not tricking anyone into a phone call that they don’t don’t want.

Ffion Haggas  5:16  

Definitely. Well, I think it’s brilliant what you’re doing because it’s people need this honest information. So, you know, people don’t know where to turn. And equities release is so much trusted. You know, why track people at the beginning? It’ll make.

Alex Curtis  5:36  

So I think we’ll Yeah, let’s talk through that as well. So, there are so there are, I suppose for consumers they are there are brokers and people that do equity release that will advertise their, you know, their service, but they’re also in front of services, a lot of lead gen companies who sell inquiries and it’s all slightly Different now since GDPR, but it’s all still GDPR compliant, they’ve got all the small printers, they’re not doing anything illegal. However, I don’t like the so our business doesn’t sell leads, it’s not something that we like to do. But essentially, there will be companies that will create a brand that will advertise equity release. And they’ll say, use our equity release calculator, and they’ll ask you to put your name your phone number, property details, and then it’s not a calculator, because it will say, or someone will call you back because it’s an easier way to get an inquiry. It’s cheaper to do it that way. So not everyone does it. But there are a lot of companies out so my advice only consumers is to if there’s something that says calculator, and it’s asking for your phone number in the first step that it did, chances are it’s probably not a calculator. Unless it’s one of the big brands that like a vive or or or whatever I’d say. Have you experienced anything or seen anything similar?

Ffion Haggas  6:58  

No, definitely. One of the things is, please enter your postcode, so we can give you your equity release figure. So people think well, if you if you hear that you think, Oh, that makes sense, because it could be it could be to do with property values. But no, they don’t need it. They just need basic to give you a basic calculation, all you really need is your age and the value of the property. quite rightly, like you say, no calculator can never give you a figure on ever on any financial product, because there were a lot of people aren’t aware of is that, yes, your how much you can borrow is based on the value of your property and your age, but it’s also the risk element as well. So how risky the lender thinks you are, how risky they think the property might be, you know, it’s all this all these kind of other factors that the lenders they keep to themselves, they don’t tell you, you know, what they think is risky and that’s the difficulty as well with You know, mainstream financial products as it is, you know, everybody’s got different criteria. And it’s a nightmare. I really do not envy the brokers having to sell stuff. And when I was in Halifax, we used to think that as if they don’t know that the brokers would ring up and ask the question, but actually, when you come out of there in your world of the Halifax criteria, you realise that actually, there’s hundreds of lenders that these brokers have to know the criteria for so it’s, you know, no calculator, like I say, because because of this criteria because of you as an individual, because that’s so important to the lender. No calculator can give you that information. However, you can start with some kind of a guide because that’s what people want to know. It’s like myself, you know, I was kind of thinking about remortgaging I should remortgage I’ve been on the same deal for the last 10 years I thought was a really good deal. And like say I’ve worked in finances, and I didn’t think I did. No, I could use my equity as a deposit until I went to work for the Halifax so it’s, it’s lots of different things that you, you said on another episode you don’t know what you don’t know. And it’s so true with with finances, but having a bit of an understanding. So you know, I might not be able to borrow 200,000 pounds for another mortgage, but a calculator might give me that figure. So then it’s an idea, I’ve got a ballpark figure, then I know that I can’t borrow 500,000 I know I can get more than 100,000. So it’s just to give people an idea, really. The calculators, no calculator can give you an exact figure. But most people starting out, they just want to do a bit of research. They want a bit of a figure where they can start and then continue that research on. They don’t put their information in and then you know and it’s it’s a waste of time. I know myself I put in my details and I do it because I want to see how their calculators work. So I’ve got an idea what kind of questions are asked Because, for me, I want to keep it, you know, as minimal as possible age, how property value, I don’t want to know, you know everything about them. So I like to see what other people are doing. And then I get all these phone calls of people to sell me equity release. And there was one I got this. The other day, actually, I got an email, and it was rates of change, check out the calculator. So went on the calculator, and then the phone started ringing. Now, it was an 800 number. So generally I wouldn’t answer that but because I was coming to do the podcast, I thought I’ll do this bit of research. And it was somebody travellers Home Equity release. You know, I just woke her. I was in bed, I wasn’t for a conversation, you know. So I was polite as I always am. But it’s just, it’s frustrating because I’m not there at the minute I’m not. But it’s gonna be a few years before I’m there for equity release. But if I was actually doing it, for real You know, you’re at that stage around doing a bit of research, you don’t, you don’t necessarily want to speak to somebody, you don’t want to have to give over all your details just to find a figure. So, you know, if you are, if you are, if you’re using a calculator, really good one is the step change calculator. So that one you can put in the value of your property, your age, and how much is outstanding, and that’ll give you a figure, no details at all.

Equity Release Calculator
StepChange Equity Release Calculator

Alex Curtis  11:26  

I was going to say what other kind of bits, I suppose warning signs for consumers? I think I can only think of if it’s asking for you for your phone number early on. Probably it’s probably going to be a lead gen site, and that’s going to be best to avoid that. I think the problem is there are 13,000 searches in the UK a month around equity release calculators. There’s a huge demand for people wanting to use an equity release calculator. That’s that’s a lot The pressure from an equity release is a really competitive market in marketing advertising, that the cost to advertise in activities on Google is very, very expensive. So your there’ll be a marketing manager or a marketing person at a company that’s spending a lot of money to advertise. And they’re getting pressure to get more to reduce the cost per lead the cost per inquiry. So they’re doing all these kind of shortcuts to get the cheaper costs in. And then what’s happening is the law of averages is the more people that speak on the phone, the more deals that go through, because you know, it is a good product, and they are they are good advisors out there that it’s just this rat race of trying to get as many people’s phone numbers as possible. And that’s a bit of a problem. Because it’s just like you say his activities already got a bad rep. And then if we’re like, making people feel even worse about it with these fake calculators, it’s kind of

Ffion Haggas  13:00  

I suppose it just compounds the problem, it’s a it’s a problem for the consumer for equity release advisors, mortgage advisors, it could be really good opportunity, because the big companies that are doing this and the lead gen companies, they, it’s just cold, it’s just we want your sale. And I think that is quite obvious from the start. And it’s, you know, it’s like this bait and switch tactic that they’re doing. Whereas the sort of the kind of brokers, the advisors that that I work with, they’re, they do it because they’re passionate because they love the consumer. So I think that for for these guys, the more transparent the more honest they are, the more information they’re giving people up friends without saying, Give me your contact details or give you an answer. What they’re saying is, we want to make our information so good that you’re going to come to us you’re not going to even think about Anybody else and then they see the other companies, the shady ones more for what they are because they see the sort of the, the good advisors and to be honest with you, the majority of advisors, I mean, they, they are good advisors, you know, they really, really care about what they’re doing about helping people. It’s a it’s a vocation, it’s, it’s, it’s a life for people, it’s not a job, you know, it’s not like working in the bank or working anywhere else. It’s helping people get get their get their ideal homes, get their dream homes or get any home. You know, and it’s really to, you know, the brokers I know that get so much job satisfaction, they love doing it, and they’re not out to trick people into rip people off. So I think if they can take that passion that’s that they’ve got anyway and give this information to people tell people what they know, without jumping through hoops to get that information. I think it’s a really good opportunity.

Alex Curtis  14:55  

Absolutely, I think that’s the way forward the problem the problem is with these bigger companies They’ll see their cost per click, or there’ll be luck, there’ll be a delay of leads coming in. Because you’ve got to spend a bit it’s a no one, you know, you’ve spent a bit of time warming, you know, getting that message across educating people letting people think about it, that I can’t see the big companies doing it, which would be a massive shame but I think the advantage then is for these smaller equity release advisors, maybe they’re self employed work themselves. You know, I wrote the book on isn’t out yet, but on the how mortgage brokers can stand out and the principles are. Another Same for activities is that when people buy from people, everyone loves a specialist. If you give information without expectation, you’ll build rapport. So that’s giving info without a sales pitch on the end. And failure breeds success and the more they are helping people on whether it’s on video or a podcast like this, letting people get to know them a bit. It’s your sort of people can get to know them before picking up the phone, they’ll be less scared to pick up the phone and then maybe they won’t need the calculator because I’d be quite comfortable just ringing Joe Bloggs or broker because I’ve already got to know him a little bit. Yes, that kind of

Ffion Haggas  16:11  

Yes, definitely. This is the thing is it’s a challenge with financial services for smaller brokers, they haven’t got the big pockets, but they’ve got something that the big companies can’t compete with. They’ve got the fact that you can ring them and they’re going to be at the end of the phone, you’re not gonna have to go through the call centre. And it’s it’s not you know, I’ve spoke to this person and then it’s you speaking to some gal she q in, you’ve got that local advisor, you can pop into their office if you need to, you know, so I think it can be really it’s a really great opportunity for the smaller brokers to you know, in these times, you know, social media, everything is the is the great leveller. You know, I know, you know, it’s maybe you can’t compete on budget, but you can compete with your passion and with your heart and I thought When everyday in my, in my books?

Alex Curtis  17:03  

Absolutely, absolutely. I so I do hope some of these bigger companies do that as well or, or at least start investing. Like don’t switch their budget overnight if they’re, if what they’re doing is kind of working for them. do that but also spend some time on that education piece as well, like keep, like they can do it. You know, if they’ve got a marketing team, they can be creating content, as well. And they can be using some of their advisors to do the same. You know, they’ve got advisors just as like the self employed people. It’s just like encouraging people to get to know their advisors as well like doing it on scale. So I hope we start to see

Ffion Haggas  17:41  

that because generally equity releases shoulders, you can have a holiday, you know, you you can do this and it’s selling the dream to people. And that can be quite dangerous because you get, you know, you get an idea in your head and once you’ve got that idea, the simple stuff you you want that and there’s nothing like money to get that dopamine going in your head, and you don’t listen to reason. I know myself, I’ve sat on Amazon ordering things, and I know I shouldn’t. But I do it before the logical brain kicks in and says, Don’t do it. And, you know, with financial services, there’s a big responsibility. He said something earlier, you know, things, it’s, you know, they’re doing, what they’re doing isn’t illegal. But it’s kind of irresponsible to be selling the stream and look at look, all this money you can release from your house for free. Wow. And you know, it’s it’s kind of no one that people are mistrustful of that because you don’t get anything for free. You know, it’s it can be can be good for the right you know, the right people, but it’s not going to work for everybody and it shouldn’t be sold. It shouldn’t be so so by getting people excited about this sort of dream lifestyle. They could have a but maybe I’m being a bit naive there really, because that’s marketing at the end of the day, isn’t it? But I think

Alex Curtis  18:59  

Yeah, It’s tough I, I understand it. I do understand the pressure that marketing because I have worked as a consultant in a call centre type environment with a very, very big advertising budget with pressure every day to get those people busy on the phones. I understand why people take those shortcuts whether I agree with it or not. No, I do. I think there’s a much better way of doing it. If you take, if you don’t just always look at the short term, look at the medium and the long term as well. And you get yourself to a position where you don’t need to do anything. I’m trying to think of the right word, but not kind of misleads, probably the wrong word. But you don’t have to do like little shortcuts, like you said, When like getting people to come back to look at new rates, and then you can tell with tracking that they have and then ring them, that people will be coming to you. So you’re like you’re you’re attracting people rather than trying to push for that business so hard. That you’re you’re trying everything you people can. Like we’ve we’ve seen how many people are searching for activities just on the calculator set, you know 13 13,000 searches a month in total just on calculate if you look at equity releasing in general it’s it’s huge there are people out there looking. And if we if we mark it in the right way I think we can get. I’m just refreshing now just of what so yeah, yeah, was it hundred and 50,000 searches in the UK around equity release.

Ffion Haggas  20:30  

So that’s every single month hundred and 50,000 people that need good information and let’s say we’re in the call centre environment. The good thing is with the brokers, the equity release advisors, they haven’t got that pressure so they can be more transparent, I believe, you know, it’s not something I would do. And you know it this is a vulnerable age group. However, you know, I know that younger people. This I think is a difficult thing with the equity release as well because if you go on the equity release comm Council. You got the the FCA ombudsman, you see the complaints about equity release, the majority of them are my parents took this out. And they didn’t know what they were doing. Now, just because they’re older doesn’t necessarily mean they don’t know what they’re doing. You know, so it’s getting this balance as well, because it’s very, you know, they might have just have, you know, they might just not want to tell them to tell their children they were doing it because they thought it’s my money. I’m doing what I want with it. But this, but this doesn’t help the industry because then it’s, you know, people complain in my, my parent was vulnerable. Well, that’s a difficult one. So because you have got because you’ve got to be sensitive to this. I think the more transparent you can be the the better it is for Well, the better you can sleep at night, and the better it is for consumers. There was one thing I wanted to say about the sort of calculators and this was something that I saw the other day so it it didn’t ask cue to put in your details it did give you a finger birth, when you put your finger in, it was preset to inflation. So house prices rising by three and a half percent. So when you put the finger in, it was like you can release 64,000 equity. And then 60,000 is what you’ll have after 15 years. So you think for four grand, that’s cheap, that’s really good for equity release. But when I put the inflation to zero, you were left with nothing. So it’s, again, it’s getting this into people’s hands. I can have that,

Ffion Haggas  22:39  

you know, and then they might be sort of looking at

Ffion Haggas  22:42  

it. I think it’s the first idea that about people getting to the head can can stack and I don’t think it’s right that the first thing should be on inflation because it is interest rates is house prices. It’s a lot of uncertainty with equity release. I think, in my opinion, you need to start with zero house price inflation. And then say that this is what could happen. So I think you need to start with worst case rather than what might happen next.

Alex Curtis  23:08  

Well, yeah, exactly all create some tramlines of worst best average, if there is an average, but you’re, you’re shooting yourself in the foot there because the expectations if that when you speak to the client, the expectation is going to be the wrong way around. So it’s gonna be hard to actually complete that deal because in their mind, they think are amazing. And then when you actually go back to them with reality, it’s not gonna be as good. So from a sales perspective, you’re shooting yourself in the foot by not making people aware of the worst case scenario. Absolutely. Awesome field bots for brokers. Thank you so much. Now that has gone in like two seconds. Obama is a rapid fellow. We’ve barely scratched the surface, but thank you so much. What we’ll do is we’ll have a link to your website in the show notes for if there’s any brokers that want to get a transparent, kind of calculated done, that is not going to be be taking people’s details without giving them a you know, we just want people to inquire when they’ve actually when they want to rather than trick them into. So, you know, pleased that you’re helping people do that. And thanks very much for your time.

Ffion Haggas  24:12  

No problems. Thank you for asking me to be on. I’ve really enjoyed it.

Alex Curtis  24:16  

Excellent. Speak to you soon. Bye bye bye

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Episodes For Advisors Episodes For The Public Equity Release

Why do Equity Release Advisors, Mortgage Brokers and IFA’s need to work together more?

Huge Disclaimer: The following transcript was generated by a machine. It’s not perfect. It’s definately best to listen to the audio version!

Alex: Hello, and welcome to the equity release podcast. My name is Alex Curtis and I am joined by Mr Stuart Powell today. Stuart, how are you doing?

Stuart Powell: Okay. 

Alex: I’m very well, thank you. So I know you quite well, but I’m guessing the people listening in may never have heard of you before. So can you give us a bit of a background about who you and are what you do?

Stuart Powell: Yeah, sure, no problem. So I’ve been helping clients buy mortgages for go on 17 years now. Most of that for the high street bank. But three years ago, I started a mortgage company. Had a few clients talking about equity release, I’ve done my qualification. So I thought, okay, I’m going to start advising and learn a lot very quickly. Then, over the last three years, the business has morphed into a predominantly equity release business A because I love helping people with late-life lending issues. And B because, yeah, it’s the future. It’s booming. And I want to be part of that. So yeah, that’s a little bit background there.

Alex: Excellent. So, obviously, the main reason for this podcast is there’s a lot of kinds of myths and kind of issues around what happened before what’s happening now. So we want to tackle that but specifically, we were talking off about situations were actually an equity release advisor, mortgage brokers and IFA could really do with working together. Can you talk me through that kind of situation you were talking about earlier, where someone I think someone was, wasn’t right for equity release, but they could there is a solution.

Stuart Powell: Yeah, absolutely. I think mortgage advisors and I’ve been guilty of this and kind of become siloed as to equity release advisors. We’ve become experts in our chosen field. And if we can’t help the client, it’s not necessarily the best practice to work with people who can refer, you can refer the client too to help in a different way. And I’ll give a quick example of this equity release, lenders will lend up to a maximum amount of about 55% of the loan to value in the property. So, putting that in simple terms and £100,000 property that whenever I go and buy a property equity release lender would lend up to around £55,000, but that’s if the client is 80 and above, equity release starts from age 55 if not £100,000 house that only lends you about 25 to 30,000. That becomes a problem for an equity release advisor. So if you’ve got a 60-year-old client who wants to borrow, say 40% of the value of the property upwards, there is a lender out there that would do it. My concern is that equity release advisor simply says to the client, no can’t do it, I’m afraid not. However, if that equity release advisor is working closely with a mortgage advisor, or is able as we are to give mortgage advice as well. There is now a raft of lenders who will do an interest-only mortgage for an older person who will do a repayment mortgage for an older person, or there are specific products, retirement interest-only mortgages that would be right for that person. So given the example, I’ve said, if you had £100,000 property and a £55,000 mortgage, there are the whole sea of lenders who would consider lending to that person. And I’m just concerned that client when they get to see an active release advisor, isn’t necessarily getting the full holistic advice they need and given the opportunity to take a mortgage instead of activities.

Alex: Yeah, okay. Interesting. So, if I put my shoes in, let’s say my mom was looking at equity release and she maybe her first thought might be about money aspect to an IFA, but what advice would you give someone who is looking then, do they ask the activities of either IFA, like who they’re working with or how limiting my options are? What’s the best approach do you think if you are lookout? 

Stuart Powell: Yeah, you know, that’s a great question and I really don’t think that’s a question that the market, customers, and clients are asking because they go to an IFA assuming that they can help with all their financial needs. And it is brilliant in many respects. Equity release advisors are experts in their field and mortgage advisors are very capable people. But if those three groups can work together to help all the client’s needs, then we’re actually providing a great service for every client. In your mom’s example, if she went to an IFA, they may well be an equity release advisor if they are great. Some IFA’s remember old equity release, and I’ve had the experience where they’ve told clients don’t go near it because it’s not a good concept and, you know, compound interest is an awful thing, etc, without really understanding the changes that have happened. So, yeah, I’m a huge advocate on IFA’s, either working with an activities broker or working with a mortgage broker or both and vice versa because for sure we can help our clients with all those needs and help each other’s businesses as well.

Alex: Okay, so it could it can get a little bit confusing then if I’m sort of in the market for of actually knowing that we really obviously want to get sit down with these people. It could be a crowded room, we’d like all three of them in and so I know you do mortgage advice, and equity release as well. But I’m also kind of thinking if someone’s listening now and they’re sort of partway down the road with someone. How do they know they’re getting the full picture? What should they be asking an IFA is it. I know, there’s obviously the equity release council. Should they be asking are they members of that? Yeah. Are there any questions that we could ask?

Stuart Powell: Yeah, it’s a good question. And I mean, if they’re seeing an IFA for mortgage advice and it is the IFA mortgage and equity release qualified, that would be the first question that I asked. I mean, if we’re talking about ensuring that the advisor is experienced and gives great service, then I would also be pointing clients in the direction of vouchfor.co.uk. And I’mbiased.co.uk because that’s the main place where advisors previous clients review the advice, and that’s great. If the client had good advice. My only question would be how does the client know that they received full advice? If you go to an equity release broker, they will give you equity release advice. But could a mortgage have been more suited to their circumstances than an equity release product? So there’s definitely a gap in the market. I know that the stock gap in the market it’s a failure of the market currently to link together. I know, our group are looking to link mortgages and equity release advisors together so that less experienced and the more experienced advisors are helping each other. I don’t know if that is going to have a branch where mortgage advisors work with equity release advisors, and I think perhaps we as advisors need to work together to close those gaps.

Alex: Yeah, no, absolutely. Absolutely. So have you got a kind of like a case and as such, where someone has been told there’s nothing they can do, but then you found something for them. We got like a scenario you could walk us through.

Stuart Powell: Okay. Yeah, that’s a really good question again. I’ve prepared a good example actually, because this happened a couple of weeks ago with a client who came to me with a £275,000 property and had £108,000 outstanding on a Halifax interest-only mortgage, with only three years left to run, and no repayment vehicle in place. 67-year-old couple. So in three years time, the banks can ask for £108,000 back and with no prospect of doing anything other than selling the property or taking an equity release. Unfortunately, as he is 67 as his wife, there’s a limit to how much they can release. Using activities around 33% of the property value, which didn’t get them enough, so 275,000 33% to that would get the £90,750. So if you remember the 100,800 was the mortgage the are around 18,000 short of where they need to be. And you can’t just directly release for some of them out of your mortgage, it has to be the whole amount. However, equity release wasn’t the right option I go decline and say nope, sorry, can’t help I say right. Okay, let’s look at other options. Well, they are on standard variable rate with Halifax and paying £398 a month. And I was able to negotiate with Halifax a new deal one and a half percent and they were paying £135 a month instead of 398. Going on to that deal, they say £263 a month. If you multiply that by the number of months left 36 months, I feel like Rachel Riley at the moment so and that calculates to £9,500. So if they carry on paying what they have got used to paying on their mortgage, they will have 9,500 of the shortfall gone in three years. So the shortfall is £17,000. They’re paying back 9,500 of it. So there’s only a £7,750 shortfall in three years time. In three years time they will be three years older and three years time, in theory, their property value will have increased that stage it’s far likelier that we could find them an equity release deal that would enable them to rate mortgage the balance that they have left, which would be about 99,000 if they had carried on overpaying. So I guess it’s not a precise are it can’t be because we don’t know what’s happening to interest rates. We don’t know what’s happening to property prices, but from going from a position of despair, where they thought their house may be repossessed, we’ve thought outside the box and created a potential solution for them. And I think that’s something we need to do more of as an industry.

Alex: Absolutely. And we’re gonna do another episode at some point on calculate online calculators and things like that. There isn’t a calculator that could have come up with that solution because you’ve got to think about all those different factors. But that’s incredible. This is why I love working in the industry of just hearing how you guys can step in and just what you did with the payments is incredible. So thank you for that. That’s brilliant. There are a lot of mortgage brokers thinking in this way or not how common I guess it is that?

Stuart Powell: We’re not yet common enough, I think, I know mortgage advisors are incredibly busy people and, really taken the time to work on and then grow their business and there are some fantastic mortgage advisors out there. But what’s that George Bush phrase? I don’t know what I don’t know, because I don’t know what it is. Yeah, you know, that’s why my mission in life is to educate clients, but it’s also to educate fellow mortgage brokers and activities brokers into other possible opportunities for their business and certainly their clients. So a lot of the LinkedIn stuff that I do is did you know that you could help clients in this way you could help clients in that way. And just last week, someone responded to one of my LinkedIn posts an IFA, we went for a coffee and I just started talking to him about how modern equity release has improved. And, and he had the old fashioned view of equity release, you know, high-interest rates, not very well regulated and flexible things like that. And I updated him with how it has changed. And literally yesterday he and I went to see one of his clients, who was stuck on a 7.24% equity release rate. Only £60,000 outstanding on their active lease. I was able to source a 2.9% rate for the 60,000. Just putting that into real terms, their monthly payment was £362. And we can do it for £145. So that saving of £2,600 a year and over 10 year period, which you know, looking at their ages that is realistic for them to live for at least that that will save £26,000 over the next 10 years. So the IFA was shocked and delighted for his climb. 

Alex: Oh, I mean that would be, that’s incredible. It gives me another reason why we definitely need to continue doing this podcast because that is incredible. So if someone has taken out equity release before that’s not kind of set in stone then we could be reviewing these on a regular basis or what regular basis reviewing them if you think you’re hard done by again.

Stuart Powell: Yeah, no, absolutely. I think there is a statistic that does the rounds that 94% of equity release clients have never reviewed their equity release, which is a shocking statistic. And in my experience is because they do not know that they can. And part of my work is spreading the message. Mortgage brokers out there will realize that I think the people whose standard variable rates, usually about 35-40%, but the equivalent of standard variable rate for mortgages is I’ve been on my equity release rate since I took it out. So the first thing we look at when we are reviewing someone’s existing activities, right is what is the early repayment charge. And the early repayment charge for the clients I just mentioned is zero because they took it out 10 years ago. So we will check first of all, what their ERC is. And when that runs out, if it does run out, or if it reduces, and we’ll do some maths that says, actually, this is how much we could save you. And even if you’ve got an early repayment charge, this is how long will take before you’re saving on your new rate. Now ways how much your early repayment charges. So that’s what I would say, I would say, over the last two to three years, interest rates have really gone through the floor with equity release. So if anyone has a rate of that which they’ve had for more than three years, review it. And the thing is us, as a group of equity release, brokers will do that for free for the client. So free review. You know, I would say, probably for every three reviews I do, to the advice will be actually no, it doesn’t make sense to do. It might make sense in three years when your early repayment charge reduces might make sense in five years, but at the moment, actually, it doesn’t make sense. Some of those reviews will be actually it will take you six months for paying you. Some will be actually in three years time. You will have saved more money than it’s going to cost you to do this. Yeah. But yeah I think we need to have those conversations and individualize them for each client to show them what is right for them.

Alex: So it sounds like an absolute no brainer, especially if you’ve taken something out before. Like you say that you know, even if one in three people could be on something better, then and it doesn’t cost anything to check, then it just feels to me than sitting down with someone, and coming back to the kind of the overall topic, make sure you’re speaking to someone that understands modern equity release mortgages, all the kind of later life lending options.

Stuart Powell: One thing I don’t understand is why equity release advisors don’t review their own clients and that’s a concept for the last year or so that I’ve been trying to get my head around. And I had a case come to me last week and it kind of, I kind of understood a little bit more and that was an IFA from Paul came to me and said, I’ve got a client whom I did some equity release for five years ago. And she wants to borrow some more money, but the lender won’t let her do it until she’s had advice. I can’t give advice, because I used to do mortgages, then I did activities now I’m just investments and pensions. So I don’t have the license anymore. So there may well be advisors out there with a bank of clients that they’ve advised in the past, that they’ve never gone back because they no longer are qualified to give the advice. So So that might be resonating with some of your podcast listeners.

Alex: No, absolutely. Absolutely. Um, so I feel like we’ve covered loads, but I also feel like I maybe like George Bush. I don’t know what I don’t know. Probably not asking the right question. Well, we definitely going to have you back on because I know you’re very humble about this. But basically the industry of coming to you and asking for your advice on things. There’s obviously a big bank, another big organization, wanting to sit down with you. So I’m sure you’re going to feature again. And then I don’t want to make this podcast a sales pitch. However, I’m sure people may want you. Are you happy if people were to ask you a question on anything if I’ve not been able to clarify it?

Stuart Powell: Yeah, absolutely. I think the thing is, I have a lot of conversations via email, phone and LinkedIn with people who are asking different questions and yeah, you know, you’re absolutely right. My aim is to get more people having more conversations with moreover 55 to get clients in the right position. And yeah, that rising tide, lifts all ships, whatever that other phrase is coming out of cliches today, that really resonates with me. Because if we’re all talking to more people about this, we’re helping more clients and we’re all growing our businesses. And you know, to don’t have to be mutually exclusive. They work really nicely together.

Alex: Absolutely fantastic. What we’ll do is if I can, is your email address easy to spell, or do I need to put the link on the website?

Stuart Powell: Yeah, put the link because I made the mistake of having a long email address.

Alex: Absolutely. So we’ll put that on there. Thank you so much. Stuart. There is again like we said, we’re scratching the surface. So many other topics I want to talk to you about. We will arrange to record more episodes as time goes on. But thank you so much for sharing that. I think that kind of for me. The one key message is to make sure you’re getting kind of full advice. on all of your options, and a no might not always be a No, it’s just a no to one product or one thing. So again, if I go back and think about if anyone asked me I’d say just Are you talking about you’re talking to an IFA, they are amazing, however, do they know about modern equity release and the mortgage options as well. So yeah, thanks very much.

Stuart’s website: https://www.oceanmortgagesplymouth.co.uk/