The reverse mortgage market is predicted to skyrocket - but can brokers keep up with demand? We speak to DARREN MOFFATT of Seniors First and KEVIN CONLON of SEQUAL for their thoughts on meeting the expected influx of demand.
Video transcript below:
Donna Sawyer, Australian Broker Online
Donna Sawyer: The reverse mortgage market is on the verge of taking off and if the government backs it as an aged care funding measure as expected, there may not be enough lenders or brokers to meet the influx of demand. Darren Moffatt of Seniors First says the only way is up for the reverse mortgage market given the ageing population.
Darren Moffatt, Seniors First
Darren Moffatt: What we have seen over the last couple of years is that reverse mortgage market has come back from a low during the GFC and has regained previous high levels that it had, even without any advertising or marketing going on by the industry. So this is telling us that the organic demand for the product is very strong.
Kevin Conlon, Sequal
Kevin Conlon: There is an inevitable growth in the equity release market. Just the pure numbers about 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 perhaps their other sources of income might be able support. So the underlyiing trends are very strong towards growth in equity release. The question then becomes of whether or not the supply is going to be in place.
Donna Sawyer: Kevin Conlon of Sequal says although reverse mortgages present a business opportunity for mortgage brokers, he warns it’s not for those looking to get rich quick.
Kevin Conlon: The key to this is that senior Australians need to make informed decisions and that is a process that needs to be undertaken with great responsibility. If you are looking for a quick turnover high volume business, then equity release is not for you. If you are looking to build engaging a meaningful relationship, not only with your customer but their children and other stake holders, than these transactions may have those sorts of relationship benefits.
Darren Moffatt: It’s really about for brokers building a good reputation in the marketplace, being a trusted source of information and I would say also specialising in this area. I don’t think it’s possibly the best outcome for a broker, John Smith Home Loans to suddenly sort of go into reverse mortgages. If you want to do it properly you should think about establishing your own reverse mortgage brand.
Donna Sawyer: Darren Moffatt of Seniors First, says brokers need additional training and accreditation before offering advice on senior equity release products.
Darren Moffatt: Ultimately you have got to really enjoy helping people and you have got to hand on heart, be very very genuine about putting the interest of the consumer above your own interest.
You have also got to be alert to other factors that you probably would not see at all or certainly not very often in the forward mortgage market or the conventional mortgage market.
Donna Sawyer: This is Donna Sawyer reporting for Australian Broker Online.