Your guide to Legal and General for intermediaries

In the United Kingdom, the financial industry is mainly led by big banks, building societies, and well-known mortgage lenders like HSBC, Coventry, and NatWest. Many people recognise them because they offer excellent services for both their partners and potential borrowers. Intermediaries and financial advisors work with these companies to get the best deals for their clients.  

There are other major players in UK’s financial industry, and one of them is Legal and General. They are a financial services group that provides services for long-term savings of their clients. They also specialise in investment and lifetime mortgages. If you are a financial advisor, Legal and General might be an ideal partner for you and your clients.  

In this article, Mortgage Introducer gives an overview of Legal and General for intermediaries. We’ll go over their background and what they can offer for clients who are looking for home loan products. You can also check if your clients are eligible for their offerings as we will also shed light on their eligibility criteria. 

Introduction to Legal and General for intermediaries 

Legal and General Group PLC is a financial company established in 1836. It is one of UK’s top financial services groups. They are also a large global investor, boasting £1.2 trillion in total assets. 

This multinational financial services and asset management company has built its headquarters in London, England. Legal and General offers investment products and other services such as: 

• investment management 
• lifetime mortgages (a form of equity release) 
• pensions 
• annuities 
• life assurance 

Legal and General is listed on the London Stock Exchange and is part of the FTSE 100 Index. Its asset management division, Legal and General Investment Management (LGIM), is the 10th largest investment management firm in the world based on assets under management (AUM). 

In January 2020, Legal and General’s general insurance division was acquired by Allianz Insurance. Because of this, they no longer offer general insurance to the public. 

Legal and General for intermediaries’ applicant criteria 

If your clients wish to apply for any of Legal and General’s mortgage products above, they need to meet the minimum eligibility criteria. They must be: 

• 55 years old and above 
• residing in (or buying) their own property and have either a small or no mortgage 
• willing borrow a minimum of £10,000 

Property requirements 

If you are a financial advisor, you should know that your clients’ property must also pass a set of criteria before applying for Legal and General’s mortgage products. Here are the requirements for the property: 

• must be made of traditional masonry construction 
• must be in a good state of repair and free of any tenancy restrictions 
• must be in England, Wales or mainland Scotland 
• must be valued at minimum of £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties 

Lifetime mortgages by Legal and General for intermediaries 

Legal and General only offers equity release or lifetime mortgages to their clients. For eligible clients, they can choose from these three: 

1. Interest Roll Up Lifetime Mortgage 
2. Payment Term Lifetime Mortgage 
3. Optional Payment Lifetime Mortgage 

Let’s explore these three lifetime mortgage options below: 

1. Interest Roll Up Lifetime Mortgage 

Legal and General offers this type of equity release that allows your clients to unlock some of their property’s equity without having to move away from their home. Their Interest Roll Up Lifetime Mortgage is secured against your clients’ home to give them cash. 

This can be lump sum or in smaller amounts. It is also tax-free, and your clients can take it as it is and when they need it. 

With Legal and General’s Interest Roll Up Lifetime Mortgage, your clients won’t have to worry about paying for monthly dues. On the contrary, the interest will be added to the total amount that they owe for every month. 

With this, both the original loan and any interest which has been added will be charged by Legal and General. The amount is usually paid back when the home is sold. This is after the borrower dies or if the remaining borrower (in the case of joint names) moves into long-term care. 

Learn more about Legal and General’s Interest Roll Up Lifetime Mortgage’s pricing when you watch this clip: 

For more on this kind of home loan, read this guide to equity release. 

2. Payment Term Lifetime Mortgage 

Another product offered by Legal and General is their Payment Term Lifetime Mortgage. This is a type of equity release for clients who are 50 years old and above. This type of mortgage can allow them to borrow against their property. They can do this paying off the interest for an agreed period of time. 

Once the agreed period has ended, interest rolls up for the life of the mortgage.  

Legal and General’s Payment Term Lifetime Mortgage (PTLM) is for clients who are: 

• 50 years old and above and with a steady flow of sustainable income 

• able to pass affordability assessments and make monthly interest payments for the duration of their payment term 

• residing in (or buying) their own property and have either a small or no mortgage 

• living in England, Wales, or mainland Scotland, and own a home worth a minimum of £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties 

You can use Legal and General’s lifetime mortgage calculator with your client to see how much they can release. Present the results and let them know the impact of interest and the growth of property prices. 

Implications of Payment Term Lifetime Mortgage 

Before applying for Legal and Generals’ Payment Term Lifetime Mortgage, your clients must be aware of the benefits and risks of a lifetime mortgage. Discuss the implications of applying for this type of mortgage and what it means for their family and friends. Let them know that: 

• a lifetime mortgage has an impact on any inheritance 

• there will be an early repayment charge if they choose to repay the mortgage earlier than the agreed period 

• there are other ways to borrow money which can be more affordable 

• any unpaid interest will be included to the amount they owe each month; the loan and outstanding interest will increase quickly when combined 

3. Optional Payment Lifetime Mortgage 

The third lifetime mortgage offered by Legal and General is their Optional Payment Lifetime Mortgage. This is one has similar features to their Interest Roll Up Lifetime Mortgage. 

It is also a type of equity release that allows your clients to unlock some of their property’s equity without having to move away from their home. It also has no affordability checks and the payment method can be set up front. 

Your client will also have no risk of payment default. Instead, they can decide to stop paying for the monthly interest payments. This can be done at any time, and your clients can still stay on their property. 

What happens if my clients stop paying? 

If your client stops making payments, the interest will be added to the total amount they owe each month. Once they decide to stop, they won't be able to restart them. Legal and General’s Optional Payment Lifetime Mortgage only allows a maximum of six missed payments in total. 

Can Legal and General decline my client’s application? 

The answer is yes. Legal and General for intermediaries has listed some of the main reasons why your client's application might have been declined. This is dependent on their applicant criteria. 

For instance, your client can be rejected due to undischarged bankruptcy. The same is true if they do not have indefinite rights to reside in the property. 

Another reason is if your client has Charging Orders registered against them. Their application can also be declined by Legal and General for intermediaries if the property in question is held in a Trust. 

Rejection due to property ineligibility 

Your client’s application can also be declined due to ineligibility of their property. Here are some of Legal and General’s reasons for rejecting an application based on property: 

• the purpose of loan is to pay for a lease extension, but the lease is too short (plus, you client did not choose the same) 
• your client’s property is a bedsit 
• your client’s property has agricultural ties 
• your client’s property is age-restricted 
• your client’s flat is part freehold 

Legal and General’s Just Covered podcast 

Aside from their guidelines and downloadable files on their website, Legal and General also has other assistive tools for financial advisors. One example is their podcast. This can be accessed through their YouTube channel. They offer advice and useful tips for financial advisors on this podcast called Just Covered. 

Check out this Just Covered episode about how to build client relationships for financial advisors: 

Partnering with Legal and General for Intermediaries 

Since Legal and General for intermediaries can only cater to specific clientele, you might not be interested in partnering with them. However, if you are a finance professional who wants to focus on niche markets, working with them can be advantageous. 

Legal and General for intermediaries can give you a boost in your career especially if you want to see your name or brand with the top intermediaries in the UK. Mortgage brokers with leads who are interested in equity release options can leverage such partnership with a trusted financial giant. 

If you are an intermediary who specialises in clients looking for other types of home loans aside from lifetime mortgages, we got you covered! Feel free to check our guides to other UK lenders’ intermediary services below: 

• NatWest for intermediaries 
• Barclays for intermediaries 
• HSBC for intermediaries 
• Nationwide for intermediaries 
• Accord for intermediaries 
• Coventry for intermediaries 
• Leeds for intermediaries 
• Skipton for intermediaries 
• Aldermore for intermediaries 
• Precise for intermediaries 

Would you recommend Legal and General for intermediaries’ lifetime mortgages if you have clients who are eligible? Why or why not? Tell us what you think in the comments.