Why a pragmatic approach is key to unlocking complex lifetime mortgage cases

When assessing any case, whether it’s a traditional residential mortgage or a lifetime mortgage, advisers instinctively start by identifying the lenders most likely to say yes. Possibly before price or speed even enters the conversation, it’s a question of working out who will be open to the loan.

That’s simple enough when the circumstances are straightforward, since there will usually be plenty of options. All lenders relish a simple scenario. But the question becomes trickier if there is some form of complexity involved, or if there are aspects to the application which are a little out of the norm.

Complexity in practice

So what does complexity actually look like when it comes to lifetime mortgages? And how can providers overcome them?

We have had a host of unusual cases recently which demonstrate some of the unique elements which threaten to derail, if not outright halt, progress if the provider is overly rigid in their assessments.

For example, one case involved a new-build property, surrounded by commercial premises on three sides. Standard criteria could have caused issues, given concerns around marketability and the resale value. However, gathering recent comparable sales data showed demand was unlikely to be significantly impacted by the proximity of the commercial units, while the new-build status and high-quality construction of the new home would also help offset concerns.

Another case we had was a particularly unusual property. It included a garage-turned-annexe which had been flagged as non-standard construction, with the added wrinkle that it had previously been used as a B&B.

On the face of it, those elements could cause concerns for a lender. However, by digging into the documents around the annexe, we could see it met building regulations at the time of the conversion, while the owners were happy to provide written assurances that it would not revert to commercial use.

Despite the complexities, we were able to find a path forward to support these applicants and deliver the funds they needed. 

Clearing hurdles

Pragmatism is absolutely vital when it comes to complexity. It’s important for any lender to have robust criteria in place, so advisers are comfortable with what scenarios will fit and which will struggle to get approval.

However, there needs to be some flexibility built into that criteria. If lenders can take a pragmatic approach, and view each case on its individual merits, then they may be able to find ways to help push forward even if there are potentially less-than-standard elements involved.

There is also a question of attitude. Some lenders might be sticklers for their criteria, determined that, for an application to proceed, it has to tick all of the right boxes. But others, like Standard Life Home Finance, will be more positive and proactive. It’s about working out how a case can work, rather than looking for reasons to turn it down. 

Dealing with complexity relies on recognising each case is unique. Advisers know this better than most - each client they see has their own story to tell, their own reasons for wanting to access some of the equity they hold in their property. No two applications are entirely alike, which is why it’s important for lenders to take each case on its individual merits. When you take the time to do that, to get to the nuts and bolts of an application, that’s when you are best able to make an informed judgement. 

Finding solutions 

Straightforward, ‘vanilla’ cases are becoming less common. Today, most come with their own nuances and complexities. That’s why it's more important than ever for advisers to partner with later life lenders who see beyond the complexity and focus on finding the right path forward.

With the right approach, obstacles can be overcome, and clients can benefit from solutions that genuinely work for them, no matter how complex the circumstances.