Stagnation kills businesses. Offering customers new and better products is necessary for consistent forward movement. Despite the lending industry being rather limited as far as products go, there are options that have gone unnoticed that can ultimately be used to expand your broker toolbox and give yourself an edge over top banks.
Changes for Current Products Leave a Hole in Market
The reverse mortgage market changed a great deal due to changes put into place in 2017, leaving many seniors who would have looked to the HECM program to tap their home equity floundering and unable to utilize reverse mortgages.
Increased upfront mortgage insurance premiums are the primary reason reverse mortgage costs are prohibitive for seniors on a budget. Additionally, the lowered interest rate floor imposed with the new regulations means that the reverse mortgage market has gotten more competitive for lenders, with potential borrowers now expecting interest rates closer to that of traditional mortgages. It means that lenders and brokers have less to gain by pushing these loans. Lastly, though loose, the credit requirements involved in getting a reverse mortgage may preclude many potential clients from qualifying.
Generally, new regulations make taking out a lump sum a more attractive option than it once was. As such, this means that Sell & Stay fits neatly into the hole that these changes have created in the market. They both allow homeowners to access a large chunk of their home equity without incurring too much damage. It would also allow homeowners with credit issues to tap their equity despite falling outside traditional qualifications.
Any time a new product is introduced, you can bet that there’s a customer base out there willing to take a chance on it, especially those customers who have already found that other products that fulfill the same need won’t work for them.
In the case of Sell and Stay, the product fills a need in the market in a new and revolutionary way. The unique parameters of this program, like how it can get customers out from under their mortgage while they continue living in their homes and give them access to a large chunk of their home equity, make it especially attractive to even consumers who weren’t necessarily looking at this type of loan product as the answer to their financial problems.
Lending Companies Must Stay Current
If stagnation equals death for a company, it only makes sense that companies look forward and aim toward the revolutionary rather than sticking to the sheltered shoals of current offerings. Companies are always on the lookout for new products. In the lending world, new products, products that are truly different, are few, far, and in between. They simply don’t come about every day. It’s important that lending companies take the opportunities to partner with companies offering alternative lending products as they come.
A partnership with us on our new Sell & Stay program offers brokers that useful new tool they’ve been looking for to expand their business, grow their client base, and continue turning a profit. If you’re looking to expand your business, contact us today.