Whether you’re a newly qualified equity release adviser seeking tips on how to make your case acceptance-ready or an experienced adviser looking to speed up your applications, an in-depth understanding of the underwriting process could help you reduce the risk of a case decline.

To help you keep up to speed with our underwriting process, we’ve investigated six key factors to consider when you make an application and the reasons why this could lead to a decline on your equity release case.

The following criteria is subject to potential changes, contact our team for the latest information if required.

1. Property alterations

If your clients have already made significant alterations to their property prior to their Lifetime Mortgage application, extra evidence may be required before their application can be accepted.

Unauthorised alterations, such as an extension constructed without planning permission, or failing to adhere to building regulations, may stop a lender from accepting an application. If these changes are only found later in the process, it could cause frustrating delays and possibly even a decline.

When significant structural work has been carried out to a property, preparing the corresponding documentation prior to application might help a case to progress smoothly.

2. Freehold estate charges

If your client’s property is managed by a third-party, finding a suitable product may be tricky, as not all equity release lenders allow it. While this will usually come up in your initial discussions with a client, their failure to disclose these charges could lead to rejection at a later stage.

While we are currently unable to accept freehold properties managed by a third party on our Core product range, our Principal product may be suitable for applications with freehold properties that are managed by a third party.

3. Building warranty requirements

Before a lender is able to offer a loan on a property, they need to confirm that it meets building standards. They may ask for a building warranty or a Professional Consultant Certificate (PCC) if the property was built or largely converted in the last 10 years. Including this evidence as part of the initial application can help to avoid delays.

4. The valuation process

Though many advisers will visit a client in their home, it may not be possible for every case if you work remotely or if your clients prefer to speak remotely. However, the surveyor will usually need to assess the property in person, and it needs to be presentable and fully accessible so that they can see every room.

In a typical valuation, surveyors will spend only a short amount of time at the property, which may surprise your clients. The surveyor will have already researched the elements that contribute to the valuation beforehand and will visit the property for a final check.

It’s important that clients understand exactly what to expect from the valuation process to avoid confusion and delay during their visit. While each client requires their own approach, you may wish to highlight:

• The purpose of the physical valuation and what your clients can expect from the visit.
• The importance of making sure the property is fully accessible and in a presentable condition to avoid delays.
• What happens after the valuation and the expected timelines for their case.

To provide a more in-depth explanation of the full valuation process, we have created valuation guides for advisers, customers and specifically for high-value cases. These guides, created in partnership with e.surv, will explain the process step-by-step, so that you can manage the process with confidence. You can download the guides today on our website.

View the valuation guides

5. Flood risk scores

Due to risk of damage, insurance costs, and other legal considerations, lenders may be reluctant to offer a loan on properties in high-risk areas.

For both our Core and Principal products, we are unfortunately unable to accept applications for properties with a flood risk score above 20%.

However, if you or your clients are concerned about the flood risk score, our Broker Support Team can help. They can help you set up pre-application checks before your application, so that you can avoid unnecessary delays, and your clients can consider other options.

We also use the Royal Haskoning DHV Flood Check System instead of the government flood checks. Contact the Broker Support Team to discuss your case.

Contact the team

6. Declaring credit history

Where credit history is clearly disclosed earlier in the process, it can help to set realistic expectations and avoid cases progressing unnecessarily. When reviewing an application, our Underwriting Team will complete their own credit check of your client.

Credit history remains one of the key factors to delay an equity release case. Though this relies upon your client’s discretion, your clients should be aware that failure to disclose their full financial situation may result in delay or decline.

Next steps

Our full underwriting criteria provides most of the information you need to determine your client’s eligibility for our products and is available to download on our website. Visit our helpful resources to see our full criteria for flats, ground rent and more.

Helpful resources

If your case’s complexities require specialist knowledge, or if you have any questions regarding the criteria we have discussed, our Broker Support Team will be happy to help. You can contact them today to start the discussion.

Get in touch with the team