Air Sourcing has launched a new borrowing forecast tool and rebroke tool that is designed to help advisers better explain the impact of different features to customers.
The distributor for equity release and later life advisers said that, with concerns being raised by some that customers do not always fully understand the impact of factors such as compound interest, these products are designed to support AIR members as they build client understanding.
It includes not only the actual cost of a specific lifetime mortgage but shows the impact of different interest rates, ad hoc fees and penalty free repayments as well as any potential future drawdowns.
The borrowing forecasting tool covers all lifetime mortgages as well as the differing product features available on Air Sourcing. The annual cost table can compare two products to show which product is less expensive each year, which can be used in discussions with clients and added to research evidence and suitability reports.
With increasing numbers of borrowers looking to rebroke, this tool is designed to help advisers to explain each customer’s individual options. Early repayment charges, ad hoc fees and further advances will all be factored into the calculations with the tool highlighting whether the new mortgage will be cheaper, and by how much, showing any cost saving annually as well as over a desired term. It will also produce a graph of the existing mortgage compared to the new lifetime mortgage with the option to include property value inflation.
Stuart Wilson, CEO at Air Group, said: “While each adviser has their own approach to explaining how equity release works and the various features of these products based on regulation, concerns have been raised about whether customers truly understand issues such as the cost of these products over a lifetime. To further support our members, we have launched new borrowing forecast and rebroke tools to aid in the advice process.
“This will add another string to our members’ bows when they are working to support their customers with user-friendly graphs, tables and illustrations. These can be included within the suitability report and for compliance purposes will provide further evidence of the in-depth nature of the advice given and time taken to explain these important points.
“With the market growing rapidly and more customers than ever considering what role housing equity can play in their later life finances, AIR remains committed to helping advisers support more customers with a wider range of different tools, systems and training.”
