Mortgage agents and brokers love products that can solve problems for their clients. One of the main unique selling proposition of a mortgage brokerage is the ability to provide options that clients can’t get from their banks.
One such option is the HomEquity Bank CHIP Reverse Mortgage – a unique product in Canada and one that allows clients who are 55+ to live a better retirement by accessing the equity in their home.
Record growth and myth busting
An increasing number of mortgage professionals – and retired Canadians – are recognizing the value of a reverse mortgage.
HomEquity Bank saw record growth of 32.5% in 2017 and in the same year saw referrals from brokerages increase by a staggering 55%.
This growth has come about in part due to efforts by HomEquity Bank to increase awareness of the product and to dispel the many myths that surround it. The source of those myths is often from media reports from other countries, where reverse mortgage products are very different from what is available in Canada.
CARP (the Canadian Association of Retired Persons), the largest advocacy agency for retirees, recommends the CHIP Reverse Mortgage. This has helped increase trust in the product.
Helping older clients overcome new stress tests
The OSFI’s new lending rules have made the reverse mortgage an attractive option for retired Canadians for several reasons:
Difficulty in qualifying for a conventional mortgage or refinance
Qualifying for a mortgage or refinance is now considerably harder for many people.
While many retired Canadians need to draw equity from their homes, the new qualifying rules mean it could now be a struggle to qualify for the amount they need with a conventional mortgage or refinance. With a CHIP Reverse Mortgage, these Canadians now have another option to consider.
A change in demand
A report drawn up by Mortgage Professionals Canada has predicted that the introduction of the stress tests will have a considerable impact on Canadians’ home buying decisions. It estimates that as many as 100,000 Canadians will have to buy a cheaper property and that as many as 50,000 Canadians could be left out of the housing market altogether.
This potential reduction in demand could make it harder to sell at current market prices. Retired clients could therefore have to sell at a lower price or may struggle to sell their home at all.
If they need to pull some equity out of their home, without selling, a reverse mortgage might be their best option.
Helping kids or grandchildren buy a home
Many first-time homebuyers now find they need to turn to their parents or grandparents for help buying a home.
With a reverse mortgage, Canadians over 55 can cash in a portion of their equity to help family members pay the down payment they need to qualify for their ideal home. Some treat this as an early inheritance, given now, when their kids really need the money.
For the parents, not only do they help their family to move in to their own home, they themselves don’t have to make monthly mortgage payments to finance it.
To learn more about how a CHIP Reverse Mortgage can help your clients aged 55 and over, contact a Dominion Lending Centres mortgage professional near you.