If you’re already CeMAP qualified and looking to advance your mortgage advice career, you might consider adding equity release to your skillset. Gordon Reid looks at what’s happening in the market and how you can qualify to advise in equity release.
Over the last few years house prices have continued to rise, and retirement income is being squeezed by the current cost of living crisis. This means that many homeowners find themselves income poor, but with lots of capital tied up in their property.
Demand for equity release mortgage products has never been greater. The main reasons customers consider taking an equity release mortgage include to:
- provide financial support to family members
- consolidate unsecured debts
- pay off existing mortgages
- make home improvements.
Is there a qualification for equity release?
Yes and you need to be suitably qualified to advise on equity release.
This means holding a specialist Level 3 qualification, such as the Certificate in Regulated Equity Release (CeRER) – on top of an accredited level 3 mortgage qualification, such as CeMAP.
Studying for CeRER will probably take you about three to six months. Once you’ve completed CeRER, you’ll have the necessary regulatory authorisation to advise on the relevant products.
What other skills do I need to advise on equity release?
CeRER will give you a good basic understanding of the relevant regulations and the different schemes available. It will also teach you how to identify which of these might be suitable for your customer.
However, it’s also important to develop your communication and relationship building skills. Your customers will mostly be over the age of 55 – a higher average age than typical mainstream mortgage customers.
That means you’ll need to sharpen your listening skills and be particularly aware of potential vulnerability. Equally, some will be financially experienced, so it’s important to respect this.
Many customers who are considering equity release will have other options open to them, too. For example, they may be eligible for a mainstream interest only mortgage. Or, they may have other funds they can access, such as those held in investments. Equity release may not be their best option.
It’s essential that you can identify these cases. You can develop your skills by working in the mainstream mortgage sector and using your continuous professional development (CPD) to focus on the later-life mortgage market.
Finally, although many high street lenders do not offer them yet, there’s a vast range of equity release products available in the marketplace. You need to become adept at understanding the terms and conditions, and assessing which one is best for your customer.
To help with this, build relationships with the business development managers (BDMs) at the lenders. And consider joining a network which specialises in equity release mortgages.
Equity release, mortgage and financial advice
You need to be aware that taking an equity release mortgage can have an impact on the benefits someone might receive, or the care they might need to pay for. So, it’s essential that your advice incorporates a holistic view of your customer’s financial position.
If appropriate, that could mean referring them to an independent financial adviser, who can take a broader view.
Or, you might wish to consider broadening your own understanding of retirement planning by studying for a qualification in financial advice.
More about CeRER