Episodes For The Public Equity Release

Equity Release On Lockdown For Coronavirus (Covid-19)

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 0:23
Hello, and welcome back to the equity release podcast. And I’m joined once again by Mr. Stuart Powell. How are you doing?

Stuart Powell 0:30
Good morning, mate. Yeah, really good. Thank you very strange times. But yeah, working hard and speaking to lots of people, lots of clients. So yeah, good. Thank you.

Alex Curtis 0:39
Excellent. So it’s just for everyone’s, so everyone knows it. today. We are recording on Friday, the third of April. And the reason Actually, I got in touch was on the back of your LinkedIn post. Because this week while you’ve been sort of campaigning for lenders to do kind of digital kind of valuations as There’s never been a activity’s deal gone through without someone physically valuing the property. Is that right?

Stuart Powell 1:07
Yeah, absolutely. It’s absolutely Equity Release has got lots of checks and balances, and quite rightly because it it can be the most vulnerable clients in society that consider equity release. So, to face to face, things have to happen with every app to restrict. One being the client has to meet, actually release qualified solicitor to give advice and actually do a certificate for the client on all aspects of activities to ensure that the client was happy with what they’re doing, and is the right type of client for actually release. They’re not to give equity release advice, but it’s a real legal check that we have. And great news is that the city testers can now do all of that they’ve been given dispensation by the equity release council by their law bodies to actually do everything for the client over the phone over video phone, other than wet signature. So that was great news and a real step forward for activities transactions being able to take place but then we still had the major block of every equity release. Mortgage needs a surveyor to go to the client’s property. The great news is that I know the equity release council all equity release lenders and their funders have been in talks about how they could circumnavigate this, but still have the right checks and balances in place for the clients for the brokers for them as as lenders and the funders as well. And the first one to break on this has been more to life who this winner of one of their funders agree that they would accept desktop valuations. And so that means more to life have products that we as brokers could discuss with clients. And actually, we can now go ahead with the whole equity release process from start to finish and go ahead and get the the money the clients request, actually to them. So yeah, huge progress. And yeah, we’ve turned the corner this week.

Alex Curtis 3:42
Absolutely. I think it’s a great thing as well. One thing always kind of I always kind of thought, from my perspective, that in terms of going back to the advice stage, I spoke to a lot of brokers and I think some of the networks or will will insist that the advice has got to be done first. face as well. But now everyone’s kind of getting used to zoom. It kind of feels to me that being able to record a zoom call, feels like there’s evidence of advice there that it actually feels safer in a way than doing face to face because he can’t unless you’re recording that conversation. There’s no reference. So it feels to me that the kind of this remote world feels like there’s more actual evidence being recorded off of everything as well, which seems hopefully for the better go for a

Stuart Powell 4:32
really strong point. And obviously, every part of the advice we give has to be right for the client has to be fully compliant. But in these really difficult times, is there any flexibility? Well, yeah, there is flexibility. But the point you make is a really valid one. The flexibility I think to to some extent has improved the process. So we are speaking to clients on the phone more, we are doing more recorded video calls, we are exchanging more emails. And actually, we’re finding that the process of advice is taking longer. But that enables the client to take more consideration time to ask better, more in depth questions, speak to their family about it more, and then come back to us and then proceed. Whereas My view is when you meet a client once or maybe twice, you walked out their family there, you have an hour or two hour interview, you may see them twice. That’s a lot of information for any clients to take on board. And people have busy lives. So very often the children can’t attend the interview, or be part of the interview. But now we’re doing three way zoom calls, and the children are there and asking the questions. So yeah, this process, actually out of adversity, we may have come up with a better process.

Alex Curtis 5:59
Yeah, sounds good. Definitely, I think that’s great that literally because if my If my mom was doing it, I definitely want to be involved. But again, she doesn’t live too far away. But actually taking some time out being able to do that would be really awkward. Whereas jumping on a zoom call, and she’s getting used to it now as well, because she will have, you know, our daughter will have zoom calls with the grandparents like every day at the minute so I think everyone’s getting used to the technology as well.

Stuart Powell 6:23
Absolutely. My my kids who are eight and 11 every night, read to their grandparents, my wife’s parents because they’re on lockdown and really bored at home. So, yeah, moments like that, where you just come. You can’t get better than that. And yeah, why not do that for us? Why not read storybooks to them at eight o’clock at night, but why not to use that for interviews and recordings and just make our process and our industry more friendly, more client focused, not compliant. driven, client driven. So yeah, we’re coming out the other side of the advice process with with I think, a much better process.

Alex Curtis 7:11
Absolutely. And what kind of inquiries you’re getting at the minute? Obviously it’s there’s some, I’m not sure if it was yourself or someone else mentioned there was a business owner looking at active release. And also, I presume, you know, a lot of people are, although the government have given lots of support to businesses, and there’s like mortgage holidays and things like that, but I presume people are, are struggling financially or depending on how long this goes on will do. Are you getting any sort of inquiries where people are trying to get access to to cash for issues that are going on at the minute in terms of like, debt or just struggling with money in it?

Stuart Powell 7:49
Yeah, you’ve hit the nail on the head there. We we’ve noticed a massive increase in inquiries beforehand. You have people who have Thought about activities for quite a while and I’ve seen your marketing senior advert seen your videos and thought, actually this this is the person I want to speak to in more depth about it. Whereas now we’re getting a lot more initial inquiries that are, yeah, I’m concerned about my personal finances. And I’m concerned about my children. They’re self employed, they fall through the cracks of the government schemes, how could I use my property wealth to help them what is available and what will that cost me? So I think two things will happen with those clients. If this goes on for as long as it’s predicted to and their families are struggling, I think they will go ahead. Secondly, I think that a lot of those clients are using it as a bit of a backstop and to really relieve the pressure on their families. So as an example, I had a client who has a son with a business that’s struggling and we We’ve looked into how much it would cost them to release 50,000 pounds from that property. And the parent has gone to their son and said, Look, this is available, I can get this for you, and have it as a backstop. But now I’ve got the son talking to a bridging and second charge company about whether they are better options for the client. So I think we’re all being more creative. And the industry is working together to find solutions for people who can’t necessarily get the government support.

Alex Curtis 9:38
Yeah, I mean, we’ve got a business finance client of ours, and there are lots of people talking to him saying that they’re still waiting to hear on the interruption loans, and I don’t think I read an article only like 1000 loans have been approved or something like that, and then the interest rates are really high. So all that’s getting kind of delayed. Had a paper, you know, with third of April, there’s just been a payroll gone through. And there’s a lot of people who are there. I’ve got friends who have got clients that have just stopped working with them, and they can’t afford to pay their old invoices. So I think people have struggled with payroll just gone. And there’ll be another one, you know, in four weeks time. And things are moving very slowly. So I think this, people are looking at different options, and as long as it’s right for them, and I think it’s great. Going back to the you can record those zoom calls, and you can give these options and there’s the bridging and other things as well.

Stuart Powell 10:35
Yeah, I think the key thing here is and you have touched on it there is if it’s right, and equity release is a very specific group of products that is only right for a percentage of the population. And I would advocate that most of these people who are contacting us extra racism right for them. Equity release is a long term product for long term considerations. It isn’t a short term fix for cash flow problems in a business in most circumstances, and I think we’ve all got to remember this. Yeah, it’s very, very good to get excited about increased leads, increased calls, but most of the people I’m speaking to from that point of view, now it isn’t right for so so yeah, we must all be really careful that we’re focusing on that. But we have got people calling us and saying my son’s there’s my son’s Oh, tell me your situation. All right. Well, I’ve got an interest-only mortgage with x bank, and we’re on four and a half per cent standard variable rate. And yeah, oh, how are you finding that? Well, we struggle with the payments or etc, etc. But that opens up a different conversation, your mortgage son to an end in a year. Well, what are you going to do after a year? Well, I think we’re gonna have to celebrate Property Do you want say property? Well, no, we’ve been here for 20 years. So so you know, it’s those sorts of conversations. And you noticed, like, the more conversations you can have with people, the more you do find out about what their their real needs are, and then not necessarily their perceived needs that they thought they had. So, so yeah, we’re having lots of really interesting conversations and sometimes helping people not in the way they expected.

Alex Curtis 12:25
Yeah, no, absolutely. I was gonna say, well, things are, you know, real, people’s mortgage deals are still expiring. Or they’re still those sort of things are still going on that that would have happened anyway. So and, and we had someone on the podcast so we were talking about the interest only and he said there’s about a million active interest only mortgages in the UK and speaking to a lot of people that don’t realise they’re on an interest only mortgage as well, which was, which was shocking for me, that they got to the got to the end and didn’t realise that they weren’t actually paying off their mortgage. And that was that was a bit frightening to hear. So is there any other kind of I don’t want to say advice or information that we can give to people who are over 55 who are thinking about actually release is it? I suppose, so many options is just just to have a conversation with an advisor. When

Stuart Powell 13:21
one of the things that you and I were discussing earlier and have done over the past weeks is, you know, there’s there’s a lot of over 50 fives, who are exactly the same as the rest of us and a huge swathe of population and that is there. They’re at home, they’re bored. They’re going online, they’re trying to save money, they’re thinking about protecting and looking after their family. And all of these things are actually quite natural things to be doing in the Straits Times. But you have a lot of equity release brokers out There are the same. They aren’t going into the offices. They’re not doing a lot of face to face appointments they used to do they have time on their hands. Use the head time, use your time or their time constructively just pick up the phone or drop them an email and say, Look, this is my situation. Give me some free advice. We will send you fact sheets, we’ll send you videos, we’ll send you some information so that you’re going from a real education or educated point of view, so that you’re getting the right help and advice and we really don’t care if you don’t go ahead. We really hit tone. We want you to know what your options are. Because from our point of view, if we help you now, you’ll tell your friends, your friends actually may be the one to want activities, not you. If you don’t need that to be released. Now, you might need it in a year. You might need it in five years. Who are you Go to your go to the ones that helped you in the difficult time. So all activities advisors out there that I speak to feel exactly the same. So, yeah, don’t be scared to pick up the phone or email us and and we’ll gladly help and give some advice.

Alex Curtis 15:17
Absolutely, I would echo that pretty much everybody mostly to get an absolute buzz on how they have helped someone achieve something. Whether it’s whether it’s remortgaging and getting them a better rate, saving them thousands pounds or cutting years of their mortgage or stopping them from losing their property. You guys get an absolute buzz out of that.

Stuart Powell 15:43
One where the client says I do not know what to do, I don’t know where to turn. I don’t know what is available on and they are in a horrible position and I hate I hate anyone to get in that position. So don’t get advice early on, but the ones where you saw Issues like that. And any broker can tell you many cases because they’re the ones that stick in your mind. And you know the the one that Wendy cases my case that I tell people about where my lady in Plymouth who’s become a really good friend came to me and had no money wasn’t eating well was wearing one pound 99 Oxfam dresses, didn’t know she had an alternative. And I went to see her just after Christmas and she’s mental health is is completely different. She’s paid off a debt. She goes to m&s most used to when she could get out to get her food, etc. So you know that that resonates with people. So, yeah, don’t struggle in silence. speak to someone before it gets to a stage where you’re worried about it.

Alex Curtis 16:52
Fantastic. Excellent. Thank you, Stuart, so much for all again, I’m sure we’re going to have you back again. When I when I can twist your arm again, thanks again what we’ll do is we’ll drop your like we did on the last episode, drop your email address in the show notes. If anyone wants to speak to Stuart or or Google equity or lease advisor in your area, there are plenty of them around but we’ll we’ll make sure we got your contact details if you specifically want to speak to Stuart, and we will see you next time. Thanks very much.

Stuart Powell 17:24
Thank you, Alex. Pleasure as ever.

Episodes For The Public Equity Release Types Of Equity Release

Equity Release Interest Only Mortgage Expiring

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. And today I’m with Mark Thompson from CS Retirement Solutions who just surprised me off air by saying that majority of inquiries that you’re getting in business, you’re doing it on people that don’t realize they’re on an interest only mortgage sort of burying their head in the sand thinking they’re paying off their mortgage but no, I just couldn’t believe people didn’t know they were on interest payment.

Mark: I know. It’s amazing, isn’t it? That about 20% of the overall equity lease market in the country. And there are over a million interest only mortgages ongoing as we speak in 2020. But the staggering figures is 126,000 of those are going to be coming to an end.

Alex: Yeah.

Mark: This year in 2020. So you’ve got somebody there has an interest in him or he’s been paying the interest only in their mortgage, and the bank has turned around to them and say or the building society. Okay, your mortgage comes to an end in June. So we want you to pay back the amount that you owe us. So customers are left thinking, well, what am I going to do? Because my situation now in retirement is a lot different or coming up to retirement a lot different to was when I was earning a lot more 15 or 20 years ago. So a lot of people are faced with actually losing their homes.

Alex: Yeah.

Mark: The banks are quite brutal, just say, we want the money to be paid back please. So where do you go?

Alex: Yeah, exactly. So it kind of makes sense that I suppose it depends on everyone’s situation is gonna be different. And so they I suppose that actually does not really help every single person there. They need the right amount of equity available. And so what do I do then? If I’m kind of I’ve just realized today that I’ve got an interest only, the banker chasing me, what’s the first thing I should do?

Mark: Well, a lot of people approach initially seeing if they can get a mainstream mortgage if you like it.

Alex: Yeah.

Mark: And all mortgages, you know, is the one available and how much does it cost?

Alex: Yeah.

Mark: The thing is, if you’ve been paying an interest only mortgage, you’re paying less payments per month.

Alex: Yeah.

Mark: So quite often the face with the fact that if they’re looking at then a capital interest where they’re paying back some of the capital, that then becomes prohibitive in terms of the amount they’re gonna have to pay back or what, you know, what vehicles they’ve got in place to pay back the money in any event. So a lot of the inquiries come from people that are just generally looking out there in desperation, lots of cases it’s people tend to leave things to the last minute in the mortgage world. 

Alex: Yeah. 

Mark: It’s amazing that they don’t always plan ahead. 

Alex: Yeah.

Mark: You know, I’ve had a letter from the bank and in two months time I’m going to be homeless, what can you do for me? And you made a valid point though that equity release it’s not it’s not for everybody and it isn’t everybody’s situation is different. So we don’t just go into equity release is the answer. 

Alex: Yeah. 

Mark: But it’s one of several possible solutions, one of which you sign for a home which a lot of people don’t do a mainstream mortgage, but they have to service that payment then. So if you’re taking a normal mortgage, you’ve heard of possibly other retirement interest only mortgages where you can carry it, take another interest only mortgage, but based on your retirement income, but you’ve got to service that in interest. And so you’ve got to be earning enough and have enough pension enough income to make sure that can be paid back. 

Alex: Yeah, absolutely. 

Mark: So give me just an example. 

Alex: Yeah. 

Mark: The easiest things a couple came to me a few weeks ago, and they’d had a letter from the bank, you know, they’ve been in their community for 20 years. And the bank was saying we want you to pay back the money. Now they were both retired but both had small part time jobs to maintain the lifestyle. 

Alex: Yeah. 

Mark: And they were fairly desperate because this has been stressing them out. They were faced with selling the home that they didn’t want to do, guess they could downsize, boom, they spent 20 years in their home and invested in it, it was lovely. It was their palace. And all of a sudden they’re faced with having to move out. And so, we go on to talk about equity release solutions. And when they understood the concept of it and how easy it was, and the fact that they could take an interest only equity release lifetime mortgage, which meant they could pay back the interest if they wanted or not. They were so grateful and happy to be able to move into that position. So they just took an amount of pay off their existing mortgage. They then had a lifetime mortgage, which didn’t then have to be repaid until either one of them died, the last one of them died or went into long term care, which is the beauty of the equity release product. So they were never going to have to pay it back until the property was fully vacated. And they had the potential of paying back the interest if they wanted or not. So they can service interest or just let the interest build up. And their decision was, well, we can take things a little bit easier because these jobs that they’ve been doing to keep the lifestyle going all of a sudden meant that they weren’t working, it wasn’t end of the world because they wanted to pay back some interest on the mortgage, they could but they didn’t necessarily have to so fantastic solution for those people, you know, and try their alternative was, you could sell a house because there was no other mortgage available to them based on their income. Well, that would have got them out of that situation. 

Alex: Okay. So what would happen then if one of them did pass away to the other person, if they’re in that equity release? 

Mark: That’s the question. Nothing per say in terms of the surviving partner is losing the house until their death or they go into long term care? 

Alex: Right. Okay. 

Mark: So that’s the key thing that you never lose your home on a lifetime mortgage.

Alex: Yeah. 

Mark: And so they basically would live there until they no longer have a need for it. 

Alex: Yeah, absolutely. 

Mark: So it’s that straightforward.

Alex: And then what happens when they’re both gone property goes up for what complications are there in the terms.

Mark: There aren’t really, it’s like any other mortgage, the lifetime mortgage or equity release with a lifetime mortgage is just a mortgage. 

Alex: Yeah. 

Mark: It is, as it says on the tin, it’s a mortgage for life. And it’s fixed for life as well. So we have the payment, the payments are fixed. And as with any mortgage, if the property sold the mortgage plus the interest that accrued, it’s been paid off. 

Alex: Yeah. 

Mark: So it’s whatever is outstanding at that time. 

Alex: Yeah. 

Mark: Isn’t paid off any balance obviously goes to the state. 

Alex: Yeah. 

Mark: The benefactors children, whatever. So if the mortgage itself is just paid off, this concept of losing the house is something that people struggle with. 

Alex: Yeah. 

Mark: The old equity lease as was many years ago that wasn’t fully regulated. 

Alex: Yeah. 

Mark: And there were these things called home reversion plans where people actually sold their property. So companies where we’re buying, we’re buying the property. 

Alex: Yeah. 

Mark: So the property wasn’t mine, all of a sudden, I just sold it to a company. They let me stay in it, but I didn’t own it.

Alex: Yeah. 

Mark: Which isn’t the same as having the mortgage. Home reversion plans now make up a very, very small percentage of the overall equity release mark up. I think it’s something like .5% 

Alex: Yeah. 

Mark: The overall market in total. So just like a normal mortgage, it has to be paid with the interest if somebody is paid the interest often serviced interest as we say. So if you bought 100,000 pounds and you service the interest, then you owe the hundred thousand pounds. 

Alex: Yeah.

Mark: You know if you’ve taken 100,000 and you’ve let the interest just compound that build up an interest on interest, then you just pay back what is owed at the time. So it was people’s decisions or what to do.

Alex: And then what the factors the lenders look at we’re not kind of looking at income and things like that if we’re if we’re so if you are kind of retired, you’ve got an interest only coming up what they’re looking at your age and what’s gonna left in the properties. 

Mark: Yeah. Generally the equity is your property generally you’ve got to be over 55. Property has to be of a certain value lenders are all slightly different. But usually a property was worth at least 70,000 pounds as a minimum. And a property that’s going to be saleable. So obviously if they grant you a mortgage for life, they will know when they get the property back that it can be sold. But generally there’s no income, so I will not be interested in income. It’s based on a client’s age, and the value of the property, and more importantly, how long they expect that client to live. So the amount they’ll lend depends on the life expectancy. So a bizarre label, if somebody is ill and hasn’t got a great life expectancy, they can borrow more money because there’s less risk to the lender in terms of the amount of time that the mortgage will be outstanding.

Alex: And what they send like surveyors around to the properties and work out the value house price. 

Mark: Yeah. It’s still like it will still be severe go around in the main to evaluate it, you know, and to make sure it’s saleable. 

ALex: Yeah.

Mark: That’s the main thing. 

Alex: Yeah. 

Mark: Like any other mortgages, 

Alex: Yeah. 

Mark: If they thought, well, we’re going to invest money in this property. This is our security. 

Alex: Yeah. 

Mark: Is it good security? Is it something that we think we would sell on the market. 

Alex: Okay. Excellent. Anything else I should be aware of? Or any other options are there? If I’m in that situation where I’ve got that letter? Or I suppose the broad question.

Mark: What well, yeah, it is. I mean, obviously, you should first and foremost speak to your bank or your building site to establish the position with them and whether or not they can help you in any shape or form. So that’s the first port of call. It is really, what is your exact position? There’s no point, you know, getting where you need to understand. seek legal advice. As well, you know, people always seem to be a bit slow in seeking the proper advice. But then speaking to people like us that, you know, we’re there to sort of guide them and direct them to the right place. You know, and obviously, with this work where we could, and I would say the point it’s not just right, this is equity release, we’ve got a look at all the options and identify the best option for the client at the time. 

Alex: Okay. 

Mark: But like anything if they don’t want to move now, then what are their options, you know?

Alex: Excellent. So it’s kind of like don’t bury your head in the sand. It might not be the end of the world you may not have to sell. 

Mark: Um, it depends on most definitely and look at it earlier.

Alex: Yeah.

Mark: Don’t leave it to the last minute.

Alex: Yeah.

Mark: You know. I used to say many years ago talking to clients that so are my bankers gray, right? Well, they’re all moneylenders. 

Alex: Yeah.

Mark: That’s what they do. You know, they’re lending you money and they’re lending you money at a rate. What you want to do is get the best rate you can. 

Alex: Yeah.

Mark: But if it comes to a point when you’re not paying them back, then they take on a different persona in that sense. 

Alex: Yeah. 

Mark: Repossessions if you’re not paying your loan back, they’re going to repossess It doesn’t matter how nice they are. Like that’s what they’re in business for.

Alex: How often should I review it if I say I’ve taken it out? The lifetime mortgage? Can I review it? Or is it set in stone? You talked about a bit of flexibility?

Mark: Yeah, that’s a really good question. Interestingly, about 5% of the market are people actually either taking more from an equity release notes, or actually totally swapping one architraves product for another. In fact, you know, the old equity release as well as with the higher interest rates, the higher interest rates where the interest if you didn’t pay it back was compounding very quickly, and people could see the depth going up. There were still those deals around and that and that’s what gives the industry all the money, a bit of a bad name, but with some of the all time low interest rates now, there’ll be a lot of people out there that should be thinking, well, I’ve got an equity release product. The only alternative is perhaps another equity release product, but the new one will be so much cheaper than the original let’s say that forms about 5% of the market. So that’s quite a heavy number. Really? 

Alex: Yeah, absolutely. We have to come back to that case study earlier whether that couple was AC grands that they kind of owed on interest only what were their payments compared to what they were paying before was? 

Mark: That’s a good question. Not too dissimilar if I recall probably slightly cheaper. Again, the rates with an equity lease vary depending on how much you’re borrowing, how much borrowing against the equity, how old you are. So the rates again, the rates are different for everybody. 

Alex: Yeah.

Mark: I think what does surprise people is how cheap the rates are. Bearing in mind the historic Oh, yeah, yes, eights, nines 10s 12%. So I mean, I’m old enough to remember them highly. 

AlexL Yeah.

Mark: Unfortunately you know, there is a fixed rate mortgage interest, you know, for life at 2.5%. 

Alex: Yeah. 

Mark: Which, where can you go and borrow money and fix it for life at that rate? I’m not saying every case is like, 

AlexL Yeah.

Mark:  But obviously they vary, but there are some extremely cheap, right.

Alex: A lot of people search online for an equity release calculator, but it feels like there’s too many factors at play to have a form or a calculator on the website, that’s going to give you the best solution.

Mark: Well, yeah, I mean, obviously, as a mortgage professional, I don’t advise anybody doing it online. Yeah, it was, I mean, you know, it’s amazing that there’s so much online but unless you’ve got a full knowledge of the old saying is garbage in, garbage out. If you put the wrong information in, and you’re gonna get the wrong information out. So as with just the general rule of mill markers I get, I get so many people coming to me saying, well, I’ve got an agreement in principle, and I’ve got it online and then you look at it their situation you think, but you’ve neglected to put in this or the other and actually the worksheet that that way, so before you know it, they can follow 40,000 more than they thought or 50,000 less than this. Yeah. So, and yet, it’s always good to, I like my clients to have knowledge and knowledge gives them the confidence to proceed with it. When I’m first dealing with anybody I’m at, you know, I want them to understand what it’s about, understand the concept. So it’s an educational thing, really getting to really understand the point and they feel more comfortable with it, you know, quite a frightening thing to do and quite foreboding, especially as people are getting older. Having said that, a lot of the older clients are a lot more savvy than some of the younger clients are gonna be very careful. 

Alex: Yeah.

Mark: I’ve got some elderly clients that will run around the block on finance. 

Alex: Yeah.

Mark: Very, very savvy, which is good. But I think anything that educates them about what they’re doing and you do find clients do do that anyway, I speak to people who have been looking at it for a while. It’s not unusual to say to myself, I’ve been looking at this for a year now. 

Alex: Yeah. 

Mark: And thinking about it. But what I can explain in 10 minutes or 15 minutes.

Alex: Yeah.

Mark: You know, overcome what they can take, and if they’ve got quite understand or the real end of the stick with something, so, so

Alex: Yeah.

Mark: I like people to have that education on it. But sometimes, a little knowledge in doing yourself.

AlexL Yeah. 

Mark: And then you’re only looking at maybe one provider and as it’s at all different. So I wouldn’t even know until I go on a system and look at the thousands of products that there are, isn’t it which is going to be the right one for the customer? Right, right. Right. So

Alex: I think I’ve got one last question. 

Mark: Yeah. 

Alex: I know he says kind of plan and not leave it to the last minute but someone’s listening now. And they have how long will this process take if we had a meeting with you, we arranged it. you were available tomorrow. How long will I know that there’s something that can be done. I don’t have to sell if I don’t want to.

Mark: And we’ll, two questions. The first one, how long does the process take? I think the average equity release time scale is about five weeks. That’s the average. 

Alex: Yeah.

Mark: So you can have some that take quite a lot longer than that. 

Alex: Yeah.

Mark: Sometimes it depends on the income all sorts of things come up with regarding the property our clients where they’ve looked at the property and said, Actually, we have to lend you the money, but the property isn’t quite where we want it to be. So we want you to do this repair, do that repair, make that roof good.

Alex: Okay.

Mark: Yeah. So that can contract something on here. I’ve literally known of clients get money released when they’re looking to buy a house. Awesome, because, again, people don’t understand they can take it on the property that they’re going to buy in the transport. Leave politics with you guys. They can have an offer out within less than a week. So again, it’s like a normal mortgage. I have some offers come out in a day and some 

Alex: Yeah.

Mark: But yeah, it is, it is a much quicker process. And generally, I would say about the industry average is about five weeks. 

Alex: Yeah. Okay. And then if I’m, if I’m panicking and thinking I really left this at the last minute, will the banks consider that I’m looking at it? Would they ever delay if they say we’re gonna, we’re gonna go to pay this in too late?

Mark: That’s a really good question. I mean, again, in my lifetime of advising people, yes, you would all banks have got a duty of care to the client. 

Alex: Yeah. 

Mark: And they’ve got to be seen to be doing the right thing. And if they can see that you’re doing something, if you’ve got the right bank and the right person on the end of the failure, then there’s no reason why they shouldn’t give you more time. 

Alex: Yeah.

Mark: To sort something out. And again, that’s why I would always encourage speaking to the bank, and keeping a good dialogue with them. So yeah, that’s a really good, really good question. But yeah, you would keep in touch. And you would hope the bank would give you time. I mean, it’s not gonna be looked up very nicely in court. If, yeah, you know, some elderly couple has told me that I moved out of the home on the basis that they’ve not given them time to actually resolve the situation. Say, actually, this is when we’re relevant, can be can be sorted very quickly.

Alex: Fantastic. So if I’ve not asked any questions, I’m thinking of an okay to drop you an email or how’s the best to kind of cover it off if someone listening has got a question about

Mark: Well, give my phone number if they want to know. 

Alex: Yeah, absolutely.

Mark: 07789941700 is the mobile and is the email address. I mean, obviously they can go to the CS Retirement Solutions website and see the team there. There’s some great information on there. They could probably even get a picture of me too. So all I am but they can get information from there as well. So I would send them down at them to go to the website or if not to contact me directly.

Alex: Fantastic. Thank you very much. Thank you Cheers.

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 And I’ 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: