Equity release lender more 2 life has launched a guide to understanding equity release lending criteria to help advisers manage client expectations.
While criteria does typically vary from funder to funder, features such as a large proportion of the property boasting a flat roof, being situated near a busy commercial property or on a flood plain will mean that the case is more likely to be declined.
Dave Harris, chief executive at more 2 life, said: “With increasing numbers of people aware of the benefits of equity release, we know that being declined by a lender can be devastating for the client and a real disappointment for the adviser who has worked to help them.
“We don’t expect advisers to be able to tell if a property is on a flood plain or not but if the client mentions that they have been flooded in the past, this should sound alarm bells and they will be aware that the case might be more difficult to place.
“Every funder has slightly different criteria and as more 2 life work with a variety of different organisations, we are in the fortunate position that we can help the vast majority of our customers but we believe it is important to educate advisers so they can start to manage their clients’ expectations.”
Other reasons that may make an equity release case more likely to be declined include: asbestos in the property and the property being previously owned by a local authority.
In addition, if it’s a commercial property, a house above a shop or with non-standard construction it’s more likely to be declined.