April 15 , 2021  /   Mortgage Trends

Home Run: The Reverse Mortgage Advantage – Chapter 4: The Joy of Aging in Place

Home Run: The Reverse Mortgage Advantage, is the new book by HomeEquity Bank CEO Steve Ranson and EVP of Marketing Yvonne Ziomecki. It provides in-depth insights into how best to serve one of the fastest growing demographics – Canadians 55+ – and in doing so grow your own business.

Chapter 4 of Home Run looks at the topic of aging in place. This is an important issue among older Canadians. According to a National Institute of Ageing/Telus Health survey, “100% of Canadians 65+ who report that they intend to do whatever they can to stay active, healthy, and independent, plan on living in their own home as long as possible.”

Chapter 4 looks at the journey to making this a reality for your clients.

Many Canadians 55+ come to us in dire straights

It can be heartbreaking how bad some of our clients’ financial situations have gotten before they come to us. They’re often in crisis and have waited and worried for a long time.

They may have ended up in this situation for multiple reasons. Maybe they made a bad investment, had an unexpected expense, or – like many – perhaps they underestimated how much they’d need saved to fund their retirement. Unfortunately, many people wait so long that things get worse, or they go down a more expensive route – like a second mortgage or a credit card with exorbitant rates.

The saddest thing to see is the affect this has on people’s mental health and self-esteem. They often feel a lot of stress and shame, like they’re a failure and don’t measure up to others. All the while they’re not living life to the fullest in retirement.

At HomeEquity Bank, we believe that people deserve to feel proud and empowered, not stressed, and ashamed. Often, when someone contacts us, it will be the first time they’ve voiced their financial concerns and it’s a real relief for them to share what’s been troubling them. When we hear potential clients being down on themselves, we always remind them that they did make at least one very smart financial decision – they bought a house!

Turning your home into security

According to a 2018 CIBC poll, 90% of Canadians don’t have a formal or detailed retirement plan, and 53% aren’t sure they’re saving enough. We often see this with our clients; while they made the smart investment decision to buy a house, many of them simply don’t have enough saved to live off.

One reason people may not have saved enough is because they figured they could count on their home as a source of funding for their retirement, although many haven’t thought through exactly what that would look like.

Options they may consider could include downsizing or a home equity line of credit, although many don’t realize that these can be hard to qualify for in older age. Downsizing is also not ideal. When we’re younger, moving to a different house seems like an adventure, but as we get older, the novelty wears off and most of us would prefer to stay in the place where we feel comfortable and have built happy memories.

That’s why we’re trying to show people that they can still see their home as a source of money – just in a different way. Homeowners have this amazing investment and a real estate market that’s been on fire for the past two decades. The challenge is how to access some of your home’s equity, and the CHIP Reverse Mortgage is the solution.

When clients take a CHIP Reverse Mortgage, their world suddenly opens. A weight is lifted as they’re able to not only cover monthly essentials, but even treat themselves every now and again as well.

If you want to learn more about how the CHIP Reverse Mortgage can help you serve your 55+ clients, contact your BDM for your copy of Home Run: The Reverse Mortgage Advantage, or order yours here.

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December 01 , 2022   /   Mortgage Trends

Summing it up: Takeaways from the 2022 Canadian Mortgage Summit

HomeEquity Bank was invited to participate in the recent Canadian Mortgage Summit held by Canadian Mortgage Professional (CMP) – a well-known publication that delivers mortgage industry news, information, and resources. Alongside a bustling Expo Hall that allowed attendees to connect with mortgage lenders, industry peers, tech companies, and more, the one-day event brought experts and leaders from across the country to discuss topics that matter most to those in the industry. Here, we’re highlighting some of our most memorable insights and takeaways from the speakers, including the Lenders Panel (a look ahead to 2023) that Vivianne Gauci, HomeEquity Bank’s Senior Vice President, Customer Experience, and Chief Marketing Officer, spoke on.   The future looks bright Although some believe that the Bank of Canada’s interest rates will go up again next month, there is light at the end of the tunnel. Many speakers agreed that by the end of 2023, rates will begin to come down. Brokers should continue to nurture relationships, find ways to provide value to their clients and source new avenues to grow their businesses. If rates decline, as some predict, and more Canadians are ready to begin the home-buying process, you will be prepared for the influx of new business.   Communication can help keep business flowing While business typically slows down the mortgage industry towards the end of the year, it’s a great time to reach out to clients. During the Lenders Panel, Vivianne Gauci shared three tips (and one bonus tip!) for keeping the conversation going and staying top of mind with clients: Check in on your clients. At HomeEquity Bank, we make “warm hug” calls to check in with customers and let them know we’re thinking of them. Now isn’t the time to sell; it’s simply a touch-base to keep the lines of communication with clients open. These calls can be especially meaningful for clients who do not have a regular social or support network. Mine your database. You likely have a robust contact list you’ve been building for years. Make use of your downtime and reach out. You may be surprised to learn about potential deals or referrals you wouldn’t have otherwise known about if you hadn’t picked up the phone. Get social. In times of uncertainty, people look to sources of authority to help with decision-making. They also tend to buy from those they know, like, and trust. Show your personality and expertise on your preferred social media channels. You will not only reach new potential audiences, but you’ll also start to stand out as a leader and authority in the mortgage space. Bonus: Ask, “How are your parents doing?”. This simple question could open up a conversation about your clients’ parents’ situation and a potential new lead.   Technology will continue to play an important role The Internet of Things may have helped to modernize the financial services industry, but it was the COVID-19 pandemic that catapulted the mortgage industry into embracing technology, from adding more robust mobile capabilities to enabling digital signatures to a more efficient funding and adjudication process. In the face of the pandemic, older Canadians have become more tech-savvy. An Environics Research poll conducted in July 2020 showed that 65% of Canadians aged 65 and older own a smartphone, a 7% jump from 2019. The poll also showed that video calling doubled, 19% of Canadians 65+ do online shopping for essentials, and 72% say they feel “confident” using current technology. With more and more Canadians making technology a part of their day-to-day living, financial services companies continue to invest heavily in technology. With the introduction of better automation, brokers can leverage technology to help streamline their business processes, allowing them to focus on other areas, such as business development and marketing.   Regulations keep everyone safe Although one speaker believed regulatory requirements should ease up a bit, most agreed that rigorous guidelines benefit everyone involved in the home-buying process. As a Schedule 1 Bank, HomeEquity Bank follows and adheres to all regulatory guidelines, and we firmly believe it helps us all. Guidelines help protect home buyers, and we feel it allows mortgage brokers and lenders to elevate their games. At HomeEquity Bank, we value our referral partner relationships, so we work hard to offer the tools, resources, and support you need to nurture and grow your business, especially during uncertain economic times. Subscribe to our Broker Launchpad, our exclusive broker portal that has what you need to promote your business and educate your clients. And when you’re ready, search for a BDM near you to learn how the CHIP Reverse Mortgage from HomeEquity Bank can be an ideal solution for your 55+ clients.
December 14 , 2021   /   Mortgage Trends

How to help your clients consolidate debt and boost their income in retirement

Have your clients underestimated how much they’ll need to fund their retirement? Although it’s hard to put an exact figure on how much each individual will need, according to Scotiabank, many financial planners recommend having $1 million saved by the time you stop working. According to the Scotiabank Retirement Survey, however, the average Canadian expects to need $697,000 – a number considerably lower than that recommended by experts. Regardless most Canadians currently in retirement or soon to enter have a shortfall in the cash flow they require to support their retirement lifestyle. Statistics Canada reveals a $20,000 shortfall between average annual expenses of $60,000 versus an average yearly income of $40,000. Further, the Broadbent Institute reports that 47% of Canadians between 55 and 64 don’t have an employer pension. More Canadians are also entering retirement in debt Many of your clients will also be entering retirement carrying debt. According to StatCan, 42% of families headed by someone 65+ are in this position -- 13.9% are paying off a mortgage, and 37.4% are carrying consumer debt. Paying off debt can be difficult for retired Canadians on a reduced income, especially when there are other expenses associated with aging. Healthcare expenses – such as home modifications, nursing care, and mobility devices – can be a particular source of concern for older Canadians. According to the Sun Life Health Index, just a third of adults are saving for a health emergency. How you can help While your clients’ debt-to-income ratio may not be ideal, their debt-to-asset ratio is probably far more healthy. 75% of Canadians 65+ are homeowners, and since real estate prices have risen nonstop since 2002, their homes represent a considerable source of wealth. You can help them access this wealth using Income Advantage from HomeEquity Bank. Income Advantage is a reverse mortgage that helps your clients access up to 55% of their home’s value in tax-free cash. Funds are provided as a lump sum of at least $20,000, followed by regularly scheduled advances of $1,000 per month or $3,000 per quarter at a minimum. This structure makes it ideal for consolidating existing debt and then boosting your clients’ cash flow going forward. And since no repayment is required until your clients leave their homes or pass away, they’ll have even more money available to enjoy their retirement. The funds received through Income Advantage are 100% tax-free, so they won’t affect your clients’ marginal tax rate or trigger OAS or CPP clawbacks. What’s more, since the program allows your clients to boost their monthly cash flow while keeping their investment portfolios intact and growing, they’ll have more set aside to cover healthcare expenses, make home renovations or even give an early inheritance to their children. Finally, with Income Advantage, your clients can rest assured that they’ll maintain full ownership and control over their homes. And thanks to our No Negative Equity Guarantee, they’ll never owe more than the fair market value of their property. If you’d like to find out more about how Income Advantage from HomeEquity Bank can help your clients live their retirement on their terms your Business Development Manager would be happy to provide you with more information. If you don’t have a BDM follow the link below to find one. Find a BDM >
July 21 , 2021   /   Mortgage Trends

Helping Clients Help Family Members

How to help your clients help family members It’s widely accepted that millennials are financially worse off than their parents, an assumption which is, unfortunately, borne out by the facts. According to StatCan, despite earning an average of $90,047 at the median age of 31, which is 18.27% more than gen X at the same age, millennials are materially worse off. They pay on average 22.24% more tax than gen X at the same age and an eye-watering 31.91% more on housing. And that’s not all, millennials have on average $26,475 in savings, a good start but not nearly enough for the down payment on a home. The bank of mom and dad It’s not surprising, therefore, that older Canadians are helping out their adult children more than ever. According to a survey by RBC, an astounding 90% of parents provide financial support to their adult children, with expenses including education costs (69%), living expenses (65%), and cell phone bills (58%). According to a survey commissioned by FP Canada, contributing to the down payment on their child’s first home is also common, with 40% of parents doing or intending to do this. Although most parents surveyed say they’re happy to help their adult children financially, 30% say they’re worried about the impact it could have on their retirement savings, and another 3 in 10 say they’re concerned they’ll have to delay retirement. The CHIP Reverse Mortgage If your 55+ clients want to access cash to help their adult children or another family member without jeopardizing their retirement plans, the CHIP Reverse Mortgage can help. The CHIP Reverse Mortgage allows your clients to access up to 55% of the value of their home in tax-free cash. Once they’ve paid off any other loans tied to the home, they can spend the money on whatever they want – whether that’s helping out a loved one or doing something for themselves, like making renovations or simply covering monthly outgoings. What’s more, since they don’t have to repay anything until they move out or pass away, there are no monthly repayments eating into their retirement income. The CHIP Reverse Mortgage allows your clients to access cash without dipping into retirement investments and savings, so they can help their loved ones while maintaining their financial security. And since the cash received is tax-free, proceeds won’t affect your client’s marginal tax rate or trigger taxes or OAS/CPP clawback. A concern that sometimes comes up surrounding reverse mortgages is whether there’ll be any equity left in the home when it’s time to sell. And the answer, the vast majority of the time, is yes. The high cost of housing is the reason why many millennials still rely on their parents for financial support, however, by using the CHIP Reverse Mortgage, your clients will be able to turn Canada’s red-hot housing market to their children’s advantage. To learn more, click here to speak to a BDM today.