A product growing in demand and easy to include in a diverse broker portfolio is reverse mortgages.
Grow and diversify your business with Reverse Mortgages
With recent changes to the regulatory landscape and lender criteria, it is more important than ever for mortgage brokers to diversify their business offering. A product growing in demand and easy to include in a broker portfolio is reverse mortgages.
Demand for reverse mortgages is increasing strongly. Australia’s leading provider, Heartland Seniors Finance, has seen an almost 500% increase in new business over the last two years, with higher house prices; sustained lower interest rates; increasing indebtedness for those in, or approaching, retirement; and an aging population all playing a part.
What is it?
Reverse mortgages are similar to a standard home loan, except they are designed for those aged 60+ and no regular loan repayments are required. The customer continues to own their home, and the loan is repaid when the last resident vacates the property (through downsizing, selling the property, passing away or moving to aged care).
Heartland has produced a simple video that helps educate brokers and customers about how a reverse mortgage works.
Australian retirees have 70% of their wealth tied up in the family home, and are 15% of the population (3.6m). While all retirees are different, most have similar priorities. They want to be able to fund an enjoyable lifestyle, to have protection against running out of money, and to continue to live independently and part of their community in their own home.
The full Aged Pension for a couple is less than $32,000 per year, and it is difficult for many to cover these essentials from this pension alone, let alone living the retirement they want and deserve.
The solution: accessing the equity in their home with a reverse mortgage.
Why brokers should offer reverse mortgages
Offering reverse mortgages allows brokers to grow and diversify their income stream with long-term, sticky loans. The loans generally grow over time, and provide a long-term revenue stream, and have little ongoing maintenance.
As there are only a few banks left in the space, and a credit licence is required, brokers have an instant advantage. Many brokers have reverse mortgage opportunities within their existing customer base and network.
Find out more
IMPORTANT NOTICE: Applications for a Heartland Reverse Mortgage are subject to our loan approval criteria. Full terms and conditions will be included in any loan offer. Fees and charges apply. Credit provided by ASF Custodians Pty Ltd (ACN 106 822 780 / Australian Credit Licence No. 386781)