A homeowner calls asking about a HELOC. An originator can start quoting rates and payments, or pause long enough to ask a more useful question: What is the borrower actually trying to accomplish?
That was the central message during National Mortgage Professional’s webinar, “The Untapped Potential In Retirement Lending: The Opportunity Most LO’s Miss,” held Sept. 17. The event was the first in a three-part series presented by Finance of America on how mortgage professionals can recognize and serve the needs of homeowners age 55 and older.
The session was led by Finance of America presenters Courtney Rozell, manager of partner engagement, and Barbara Cripple, CRMP, national sales training manager, with NMP CEO Andrew Berman serving as moderator. They explained how originators can identify retirement-lending opportunities, question longstanding assumptions about reverse mortgages, and listen for borrower comments that may warrant a deeper conversation.
Older homeowners may ask about a familiar product even when the problem they need to solve is much broader. Rising expenses, mounting debt, a planned move, or concern about making retirement savings last can all sit beneath a seemingly straightforward request for a loan.
“Traditional lending solves for the loan,” Rozell said. “Retirement lending really solves for the homeowner’s long-term planning goals.”
The Product Request Is Only The Beginning
The webinar focused on homeowners age 55 and older, many of whom have built substantial equity but have less flexibility in their monthly budgets.
Finance of America reported that Americans age 55 and older hold nearly $15 trillion in housing wealth, while roughly 11,400 people turn 65 each day. The company also cited a $3.68 trillion retirement savings shortfall and said one in three older Americans worries about having enough money to live comfortably in retirement.
Those figures point to a large potential market. But the presenters argued that originators will not necessarily find it by waiting for borrowers to ask about retirement-lending products.
“Many times, the borrower comes in asking for a certain product,” said Cripple, CRMP, national sales training manager at Finance of America. “The trigger is not the product that they mention. The trigger is the goal, their concern, or the life change underneath it. Products come later.”
A borrower asking for a HELOC, for example, may really be struggling with rising monthly expenses. Someone seeking a cash-out refinance might be trying to eliminate high-interest debt before retiring. A homeowner considering selling may want to stay near family but believe moving is the only affordable choice.
“The initial request tells you what they want,” Rozell said. “Better questions reveal what they are actually trying to accomplish.”
Listen For What The Borrower Is Really Saying
Rozell and Cripple identified several comments that should prompt an originator to slow down and ask more questions.
“Our expenses keep going up” may point to pressure on monthly cash flow.
“We want fewer monthly obligations” could signal a need to address credit cards or other consumer debt.
“We want to move closer to our children” introduces a housing transition that may involve affordability, available cash, and the borrower’s ability to qualify on retirement income.
“We need our savings to last” suggests a larger retirement-planning concern.
And “we want to stay in our home” could involve much more than a mortgage. The homeowner may be worried about repairs, property taxes, insurance, mobility, or the cost of modifying the property to age in place.
Recognizing those cues is not the same as steering a borrower toward a particular loan.
“Recognizing the trigger does not mean recommending the product,” Cripple said. “It means making sure the client knows that there may be another option.”
That qualification is important. A reverse mortgage can be useful in certain circumstances, but it is not right for every borrower. Rozell noted that someone expecting to move within the next two or three years, for example, may not be a good fit.
“There’s no product that does that,” Rozell said of finding one loan suitable for every situation. “That’s why it’s so important to ask deeper questions to really understand what the borrower’s need is.”
Moving Beyond Transactional Questions
Questions about credit scores, income, loan amounts, and affordable payments remain part of the job. But the presenters said those questions can become too transactional if the conversation stops there.
Originators can learn more by asking:
- What does retirement look like for you?
- How important is monthly cash flow?
- How long do you plan to stay in the home?
- What changed that made the current payment more difficult?
- How soon are you hoping to retire?
- What would this loan allow you and your family to accomplish?
Those questions can change the direction of a loan consultation.
An older homeowner with a low-rate first mortgage may not want to replace it through a cash-out refinance. A HELOC would preserve that rate, but it would also add another required monthly payment. If the borrower’s real concern is cash flow, neither option may fully address the problem.
The point is not to rule those products out. It is to compare them with the borrower’s actual goal rather than treating the first product mentioned as the final answer.
Three Borrowers, Three Different Problems
The webinar used three hypothetical borrowers to show how similar requests can lead to different conversations.
One homeowner wanted to consolidate debt and reduce monthly obligations. Another couple hoped to relocate closer to family without spending most of their available retirement assets on a home. A third wanted to build an accessory dwelling unit while preserving an existing low-rate first mortgage.
The presenters compared traditional financing with retirement-lending options in each case, including a reverse mortgage for purchase and a reverse second-lien product.
The examples were designed to show how the borrower’s age, plans for the property, existing mortgage, and monthly cash-flow needs can affect the available choices. A product that works for one homeowner could be a poor fit for another, even if both initially ask for access to home equity.
The Opportunity May Already Be In The Database
For originators, retirement lending may not require an entirely new source of leads. The opportunity could already be sitting in a database filled with former clients who have aged into retirement, accumulated more equity, or encountered new financial pressures since their last transaction.
“This isn’t about finding new leads,” Rozell said. “This is about accessing leads that are already in your book of business.”
The opportunity also extends beyond the immediate transaction. Older homeowners may need help consolidating debt, moving closer to family, buying a more suitable property, or modifying an existing home. Their adult children may also become future purchase borrowers or referral sources.
But an LO who answers only the original product request risks losing that broader relationship.
“If you fail to let them know about all of their options, someone else will,” Cripple said. “And that’s where their future business is going to go.”
The next installment, “The Untapped Potential In Retirement Lending: Home Equity Options With Modern Retirement Planning,” will be held Thursday, Oct. 8, at 1 p.m. ET.
The second session will move from identifying borrower triggers to comparing traditional and reverse mortgage strategies. Presenters will use borrower scenarios to show how home-equity options may affect cash flow, asset preservation, and longer-term retirement plans.
Register for the next session, and visit NMP’s events calendar for more upcoming webinars and industry events.
