TV: Specialists required in reverse mortgages

by Mackenzie McCarty23 Apr 2012

Reverse mortgage demand is building organically despite product scarcity, however those brokers who are not specialists may not be well suited to pick up on the predicted wave of future demand.

Speaking with Australian BrokerNews TV, SEQUAL's Kevin Conlon said the future was sure for reverse mortgages, as seniors look to access the equity they have in their home.

"Just the pure number of senior Australians moving into retirement, the fact that their wealth is concentrated in the family home, and that longevity suggests that people are going to live longer than their other sources of income are going to support," Conlon explained.

"So the underlying trends are very strong towards growth in the equity release market. the question then becomes whether the supply is going to be in place," he said.

Indeed, Seniors First's Darren Moffat said that reverse mortgages are growing to levels as high as those seen prior to the GFC, despite no advertising or marketing going on in the industry.

"This is telling us that the organic demand for the product is very strong," he said.

However, Moffat said it would be best for a broker to specialise in the area, rather than dive in in an attempt to add a new revenue stream for the business.
 
I don't think it's possibly the best outcome for a broker from John Smith Home Loans, to suddenly go into reverse mortgages," he said.

"If you want to do it properly you should think about establishing your own reverse mortgage brand."

Related stories:

Government to support reverse mortgages, but supply scarce

Reverse mortgage legislation applauded

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