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Fund manager plans new mortgage product for brokers

 

 

Fund manager plans new mortgage product for brokers

Nick Bendel Comments 1
— 3 minute read

A fund manager plans to enter the mortgage market with an equity release product that will let home owners of any age sell ‘shares’ in their home.

Fund manager DomaCom has revealed it is in the process of gaining regulatory approval for two ‘fractional equity release’ products, which it hopes to launch by the end of the year.

The standard product will allow home owners to sell off a percentage of their property to investors, while a seniors version will be similar to a reverse mortgage.

Head of sales & marketing Warren Gibson said DomaCom would make its debut in the third-party channel by offering the products through brokers.

Brokers will profit by charging a fee – rather than earning a commission – although the size of the fee has yet to be determined, he added.

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“We did run this past a number of mortgage brokers when we were putting it together to gauge the level of interest and it was very strong,” he told The Adviser.

“It’s a product they can really get their teeth into and generate revenue through.”

Mr Gibson said the fractional equity release products would give home owners new funding options.

“It could be anyone from a mum or dad who wants to pay for school fees or an SMSF that is overexposed to property and wants to get some equity out without selling the entire property,” he said.

Mr Gibson said the DomaCom products would allow clients to invest in real estate without the need to buy an entire property.

They will be able to buy and sell property shares via an online peer-to-peer market, which will operate like the stock market, he said.

[Related: Third-party channel writing only 22pc of reverse mortgages]

Fund manager plans new mortgage product for brokers
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