Brokers should be getting into reverse mortgages, according to one of the leading lenders in the sector.
Heartland, who recently passed $1 billion in settled loans, said that over 50% of their flow came through the broker channel, and that brokers were missing a potential opportunity if they ignored reverse mortgages.
Reverse mortgages involve borrowers using the equity in their home as collateral to generate income, whether that be to fund retirement or to adapt a home that they already own to be more senior-friendly.
“We have an aging population in Australia, and more than just that, people are retiring with debt,” explains Sharon Yardley, head of operations at Heartland. “The age pension alone cannot provide people with what is considered a comfortable retirement, so when you’re looking at the baby boomer generation they need help as they are carrying debt into retirement”
“93% of Australians want to remain in their home for as long as possible, but 29% can’t afford the changes needed to make their home more aged friendly so they can stay there.”
“Mortgage brokers are ideally placed to provide a full service offering to their customers by being able to support their client base as they get older, or who have parents who need to access money to help them in retirement.”
“The demographic is just going to get bigger, get more interesting and provide more opportunities for brokers to help them.”
The personal touch is one that brokers can provide to an age demographic that is less concerned by fast technological advantages, though Heartland are also providing digital application processes.
“It’s a combination of both,” said Yardley. “We really pride ourselves on having a digital reverse mortgage offering, where both brokers and customers can put their applications through online, and no matter how old you are, you want your loan quickly.”
“The difference is that our customers value speed as well as service, so we need to get that balance. We have a digital offering that brokers can put through online, but many customers want that personalised service and to have that discussion with a person and to build that trust. It’s a hybrid and you need both to meet the market.
Heartland are already doing over half of their business through the broker channel.
“Brokers are an extremely important part of Heartland,” said Yardley. “They make up over 50% of our loan book. We’re not a bank or a large finance provider, we’re a specialist, and we excel in what we do, which is reverse mortgages, and brokers are vital because they provide us with distribution across the country.”
“More than that, we look after customers directly through online and phone channels, but many customers want to see someone in person, which gives brokers an opportunity. They can meet the need of the demographic and have those genuine, in person conversations which is what they do so well.”
