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Broker searches show need for later life mortgages

The top search on Criteria Hub backs up evidence that more older borrowers are looking to buy property. The deep search engine for mortgage advisers, clubs and networks, has revealed the number one search for residential mortgages is the phrase “maximum age at end of mortgage term”.

This reinforces evidence of the growing number of cases where older borrowers are looking to seek funding either to raise capital or for new purchases.

In the buy-to-let (BTL) section, the requirement from lenders for applicants to show an income separate from their rental income has meant that brokers’ primary search is to establish which lenders have a minimum personal income requirement.

Jason Hegarty, director of Criteria Hub, said: “Simple criteria like maximum age limits for residential mortgages and minimum income requirements for buy-to-let cases might not seem important, but the volume of enquiries about the same topic allow us to create a bigger picture of the areas where advisers are seeing the most demand.”

Martin Stewart, director at London Money, said: “Longevity is going to be the silent killer for current mortgage criteria and the sooner people wake up to the fact that the speed in demographic changes is moving faster than the pen that writes the rules, the sooner we can start to address the issue.

“We all need to realise that things change whether we want them to or not. It is far better to get ahead of the curve and wait for the problem to arrive than forever be chasing it off in to the distance .

“There is an opportunity for government, regulator and lender alike to grasp the issue. The later life sector will be more fruitful and longer lasting than buy-to-let so moving capital and resources into a new area would make perfect sense.”

This comes as Criteria Hub revealed the top three searches made by its broker users for residential and buy-to-let mortgages so far in 2018.

The second most popular search for residential enquires was “defaults (unsatisfied) potentially accepted”.

This indicated if a lender can potentially accept applications from applicants that have had or currently have unsatisfied defaults registered against their name.

In the buy-to-let category, the second most common search was on expat buy-to-let, which indicates if a lender can potentially consider buy-to-let applications from expats.

Finally, the third most popular search for the resident market was “interest-only: sale of mortgaged property”.

This specifies whether interest-only, with the repayment vehicle ‘sale of the mortgaged property’, is an acceptable repayment method on residential mortgages.

Lastly, the third most common search for the buy-to-let market was ‘first-time buyer’, which indicates if a lender can potentially consider applications from those trying to get onto the property ladder.

Source: FT Adviser