Professionals in the reverse mortgage industry (including brokers, loan officers, and lead providers) frequently toss questions around relating the revere mortgage industry in a broad sense. Is the boom here to stay? Is continued growth in the reverse mortgage industry sustainable? How many more brokers and agents can come into the market and without diluting the opportunity?
All of these questions are important many of us who work in and around the HECM reverse mortgage products and services. It is important to consider the long-term prospect of this market.
Is the boom here to stay?
Most likely, yes. That is far from a definitive "Yes!" and does not reflect some of the biases that I have against some elements of current product offerings. Nonetheless, the fact is that seniors have more house than they have cash available to spend on rising bills and the government has created a program to offer an option.
The opportunity to have a cake and eat it too, is a characteristic of a product that is here to stay. As long as prices keep going up for necessities and senior income remains fixed, people will be taking reverse mortgages and the more people take reverse mortgages the easier it will become to sell them.
There was a time, albeit many years ago, that nobody had a mortgage. (Yes, that was a long, long, long time ago - probably millennium or two.) Now having a mortgage is part of the pursuit of the American dream.
It is so common now to have a mortgage when entering retirement that many wealthy households choose to use a mortgage as an instrument of leverage. Many people who can afford to buy homes cash do not. Mortgages, remain "and death" and for many families the largest single monthly payment, but they are better than the alternative in which is paying for the whole thing cash in today's dollars.
There has been enough rapid expansion in the market that businesses are shifting to new models to capitalize on today's originations and be positioned for the long-term returns. These changes have brought new capital the marketplace and this is expressed as and increased demand for good lead - which, consequently leads to more marketing and public awareness about the benefits of the product.
Although critics may disagree, this is the definition of a "virtuous cycle". This industry will continue to grow for the next few years because the legal and financial situations that presently are almost perfect for the product.
Is continued growth in the reverse mortgage industry sustainable?
The growth in the industry is absolutely sustainable; however, the rate of growth has limits. The industry right now is growing at the fastest year over year rate that we will see. However, the rate of growth in absolute terms will increase significantly as the baby boomer generation retires.
The reverse mortgage market is new. There have not been a lot of products that allow you to buy food, clothing, and medicine with the equity in your home, while not adding to monthly out-of-pocket expenses.
The reverse mortgage is becoming popular for many seniors, because they need the money now and need the house too. This is why the industry has staying power.
This article has been submitted by Byron Syphrett is a provides reverse mortgage lead resources.
For more information, please visit: Reverse Mortgage Leads