Dean Mirfin

Can equity release offer a solution to borrowers unable to access bridging?



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In an exclusive interview with Bridging & Commercial, Dean Mirfin, chief product officer at Key (pictured above), has revealed that older borrowers unable to access bridging finance could turn to equity release as a solution.

Dean explained that Key was seeing more of this type of borrowing, especially from older customers who were unable to obtain bridging or alternative forms of serviceable finance due to affordability.

“As a result – where the maths and economics work – equity release can offer a solution to some borrowers,” said Dean.

“We are already working with many brokers across many offerings to widen the scope for where equity release could provide solutions.

“It is lending like any other, but what we are [increasingly working on with various specialists] is how extensive the uses of equity release can be where affordability does not form a constraint.”

Dean explained it had seen clients who were downsizing and who had found their next home, but were not ready to sell their main home, either now or in the short term.

“We especially see those who do not want to be forced into a quick sale, especially among those with considerable properties.

“It is really important to point out, though, that the maths of any options considered plays a huge part in suitability.

“For lifetime mortgages, any early repayment charges must be factored into both the costing and the overall suitability debate.

“For some, though, getting their dream final home is compelling and equity release may be the way they can achieve this.”

Dean also claimed that there was an ever-increasing number of older homeowners setting up their own businesses, with equity release providing the necessary cash injection to get them off the ground or to fund further growth.

“We are also increasingly seeing older homeowners helping their children with businesses as well, where other finance options are either unsuitable or unavailable.

“Alternatives, where appropriate – such as equity release, for some customers – add an additional alternative, or may prove to be the only options available to a client.

“[In] our view, even if it is better for just one client in 10 or allows that client to borrow when no options exist through alternative means, then we have helped them.”

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