With new home purchase business on the decline due to the coronavirus pandemic, brokers should look at diversifying their offerings and attracting different demographics
Changes in the mortgage industry have been accelerated by the COVID-19 pandemic, as we adapt to new technology, new regulations, and an increased need to help Canadians increase their cashflow. As business changes, brokers will need to be agile and adaptable so that they can continue to thrive.
One of the biggest threats facing the average broker business right now is the steep decline in the home purchase business, and a slow recovery as we emerge out of the coronavirus pandemic. The Canada Mortgage and Housing Corporation (CMHC) is predicting that new housing construction will be slashed by at least half this year and prices and sales on existing homes are in for a deep decline. The national agency says sales likely won’t recover until the middle of next year and will remain below pre-pandemic levels until 2022.
While it feels natural to try and compete for more purchase business, Agostino Tuzi, national partnership director, mortgage broker channel at HomeEquity Bank says the space is crowded and dwindling. Diversity in products and new clients will be a great asset in moving beyond the pandemic.
“Most brokers don’t realise that 39% of their customer base is over 55-years old,” said Tuzi. “This is the largest and fastest growing demographic and they are grossly underserved.”
Brokers who differentiate themselves by providing a wide range of products that could appeal to this demographic are the ones that will come out on top. A reverse mortgage is a long-term solution for Canadian homeowners over 55 to access their home equity and turn it into tax-free cash without the requirement of monthly mortgage payments. Unlike a traditional mortgage, principal or interest payments won’t have to be made until the homeowners leave their home. Older clients can leverage the equity in their home to eliminate debt and increase their cash flow or they may want to use it to help loved ones through these difficult times.
For brokers to attract this underserved group of borrowers, developing their expertise in products like reverse mortgages and modifying their communication strategy to best suit this demographic is a great place to start. To find out more about the CHIP Reverse Mortgage and how you can help your 55+ clients with a reverse mortgage solution, contact your HomeEquity Bank BDM at www.chipadvisor.ca/bdm.
