It’s no secret that the reverse mortgage has been on the rise lately. For those aged 62 and older, it can mean the difference between buying a home they think they can afford, and buying a home they love.
When you’re ready to choose a home to spend the remainder of your life in, the idea of taking on another mortgage payment can be daunting, especially during a time where you’re living off a fixed income or retirement savings. Not to mention, you may need access to additional funds to secure your quality of life. For some, this means buying the home they love, or staying in the home they love, just wouldn’t be feasible.
That’s where the reverse mortgage comes in. With a reverse mortgage, those age 62 and older can have access to an FHA insured loan designed to help them buy their next home or refinance their current home with one initial investment, without having monthly mortgage payments. Though the borrow needs to be the primary occupant of the house, they won’t need to repay the loan until they no longer use the home as their principal residence or fail to meet the obligations of the mortgage.
Because of this leniency, more cash flow can be freed up for retirees to use toward medical expenses and house upkeep, among other necessities. The borrower also has convenient options to access these funds including taking a line of credit, a lump sum, or monthly payout. With the amount of options a reverse mortgage provides, it’s no surprise that more and more seniors are considering it to help them through their retirement.
So, as an SRES® Designated Realtor, what does this mean to you? And how can you leverage the reverse mortgage to help boost your business? Studies by the National Association of Realtors show that 22% homebuyers are age 62 and older, the age at which a borrower can apply for the reverse mortgage. Of these homebuyers age 62 and older, 82% are taking out a mortgage on a new home purchase. However, less 1% of these homebuyers are using a reverse mortgage, even though it may provide a better option for them and their needs.
Since awareness of the reverse mortgage is relatively low, this provides a great opportunity for you as an SRES® Agent to gain a competitive advantage by learning how to educate your clients about this financing option. You could do this a number of ways, including holding a seminar and inviting a reverse mortgage specialist to come speak, or teaming up with a reverse mortgage specialist to refer clients to. Either way, your diligence to let you client know all of their financing options will help you stick out among other agents.
If you’re interested in learning more, SRES® has a variety of different webinars that cover the reverse mortgage as well as business partners, such as Reverse Mortgage Funding LLC, that can clarify any confusion and answer questions. These are all available to you as part of your member benefit package with SRES®.
Don’t hesitate! Take the next step to educating your clients, and soon you’ll be the talked about agent in your town!