In the reverse mortgage world, the Home Equity Conversion Mortgage (HECM) Saver is the trendsetter.
It was the introduction of HECM Saver in 2010 that prompted changes in the business. From the original HECM standard upfront premium of 2 percent, it is down to .01 percent. This means that under HECM Saver option, a property worth $150, 000 only costs a senior homeowner an upfront premium of $15. Under the HECM standard, the upfront premium is at $3,000.
With the advent of the less costly alternative, financial planners and retirement researchers reevaluated the use of reverse mortgage. Now, reverse mortgage is considered an effective tool to stretch a senior’s retirement portfolio, a means to delay tapping into Social Security benefits and a tax-free income for long-term care.
While the reverse mortgage is gradually taking the retirement planning center stage, its market is also evolving.
From a technology-adverse group, seniors are now becoming accustomed into the use of Internet and e-mail. According to Pew Research Center, 53 percent of 65 and older Americans used the Internet or e-mail in April 2012. This was the first time that a large number of seniors in the said age range made use of the Internet and email.
How then these changes brought by the product (HECM Saver) and the market (seniors) will factor in reverse mortgage leads generation?
Online reverse mortgage leads will eventually become the best way to reach seniors and earn their trust. It will probably take some time for the Internet to take over the power of mail and the printed word especially for a generation introduced to a different world of communication. Nonetheless, the waiting period may be soon over!
The statistics have spoken: seniors have already embraced the World Wide Web and its offerings. The 150 percent jump in seniors’ use of social networking sites like LinkedIn and Facebook from 2009 to 2011 could vouch for that. It suffices to say that online is a viable way to create reverse mortgage leads. Any reverse mortgage lender serious about expanding its client base but limits its marketing mix to direct mail and TV is restricting its revenue.
With 13.8 million Americans ages 60 to 69 considered as owner-occupiers; a typical senior averaging nearly $140,000 in home equity, and the Federal Housing Authority on the work to addressing the high cost associated with HECM, the reverse mortgage business has a positive growth outlook. However, without an effective strategy for leads generation, high conversion rates may prove to be difficult.
The Internet is not just the most democratic of all the mass media. It is also one of the least expensive, yet is able to reach a particularly large market. Acquisition of online reverse mortgage leads from a lead generation company, which has earned the respect of seniors, is timely. The changes brought in by HECM Saver, and the seniors’ revolutionary embrace of the Internet are business opportunities that should be seized and should not be missed!
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