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Boulger warns over non-Ship shunning

John Charcol senior technical manager Ray Boulger is warning mortgage brokers not to ignore lifetime products just because providers are not members of Ship.

He says some lifetime products already in the market offer equal if not better drawdown facilities regardless of club membership.

His comments follow the release of product details for Prudential’s property value release account.

Boulger praises Pru’s flexible plus plan to increase the loan to value by 1 per cent each year but thinks the drawdown values are too high for some customers.

Pru is a Ship member.

Boulger says for a property valued at 200,000, a client would have to wait three years after the initial 15 per cent equity withdrawal before they could exercise the option to draw down 1 per cent a year because the minimum is 5,000. Minimum initial loan is 20,000.

Scottish Widows Bank’s product has a lower minimum initial loan of 10,000 with further advances of 5,000 which can be withdrawn in 1,000 tranches. Boulger says market commentators often ignore such products pur- ely on the grounds of Ship membership.

Widows Bank business development senior manager Murdo McHardy admits that firm’s decision not to join Ship may mean it is sometimes overlooked but he claims the bank has reached all its lifetime mortgage targets since launch.

Boulger says: “The Pru’s flexible plus option is innovative in itself but drawdown on a guaranteed basis is offered by many other people. Scottish Widows does but is not recommended by some of the well known advisers of this world. Why? Because it is not a Ship member. To exclude any product purely on this is simply bad broking.”

Prudential pr manager Natalie Eyles says: “Yes, Ray is correct but only if the applicant takes out the maximum LTV at the initial stage. Remember this value is also guaranteed. We pride ourselves on the flexibility of our product.”

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