Guidelines for lifetime mortgages issued
The CML has announced a series of new initiatives designed to help the lifetime mortgage market to develop safely and responsibly.
10:18 15 October 2004
The Council of Mortgage Lenders (CML) has announced a series of new initiatives designed to help the lifetime mortgage market to develop safely and responsibly.
Growth in lifetime mortgage lending (or equity release mortgages sold to older homeowners) has slowed this year and experts believe that heightened sensitivity following special rules under a new FSA regime has contributed to the slump.
The CML says its initiatives are designed to help give confidence to lenders and intermediaries and to strengthen the integrity of the information given to borrowers to comply with the new rules.
The initiatives include producing a set of good practice notes for the selling of lifetime mortgages, information on the potential impact on tax and benefits of taking out an equity release loan, and software to assess tax and benefits impacts on individual households.
Commenting on the initiatives Jackie Bennett, CML senior policy adviser, said: "The new rules for lifetime mortgages go beyond the FSA's requirements for normal mortgages. And one of the technical complexities they create is the need for advisers to take account of how a particular lifetime mortgage could affect an individual borrower's tax and benefits.
"We hope our new guides, and the specialist software, will give lenders and intermediaries the tools they need to have confidence that they are successfully complying with the new lifetime mortgage requirements under the FSA regime."