Fonzie never rode a motorcycle. No, really (well, once, but they had to pull it out from under a truck afterward). Henry Winkler, the actor who played Fonzie, struggles with dyslexia to the point that he has never been able to handle the motions required to ride a motorcycle. On Happy Days, he would sit on a motorcycle frame that was on a trailer and get pulled around by a truck. And he looked cool doing it.
The trick was to create the image that what he was doing was really happening. And it worked.
Today, Henry Winkler is back on TV as a spokesperson for reverse mortgages, attempting to create a positive image (primarily for the company that pays him, but also for the loan type and the industry as a whole). And the issue on which he speaks is getting a lot of attention in media, both traditional and social. The narrative surrounding reverse mortgages is, let’s say, polarizing. But unlike The Fonz on Happy Days, looking real isn’t good enough — this industry will have to convince the audience that what they are seeing is actually a real option with tangible benefits.
Today, reverse mortgages are gaining some positive attention as new rules make the option more attractive to both borrowers and the certified HECM loan officers who handle them. About 14% of older Americans are tapping into their home equity, providing them with the opportunity to stay in their homes and the trend for the future is looking bright.
New rules and regulations take into account if the borrowers can afford their property tax and home insurance, and in turn are creating a more appealing image for reverse mortgages. Many experts are now promoting reverse mortgages to older individuals as a way to effectively plan for the future.
Old Dogs New Tricks
In July 2013 congress passed the Reverse Mortgage Stabilization Act. The new rules make sure that homeowners who are applying for reverse mortgages can afford their homeowners insurance and their property taxes before proceeding with the loan. Married couples can now get reverse mortgages together even if only one spouse is 62 or older. The new rules have also decreased the available amount of money in many situations, and financial data such as credit scores will come into play. All of the new rules are meant to make reverse mortgages a safer option, and in turn defuse some of the negative perceptions surrounding the industry.
What they don’t know may help them
With all of these new and improved perks added to reverse mortgages they should be easier to sell, right? Well, they are — but not as easy as any of us would like. A large percentage of the population remains skeptical when it comes to reverse mortgages. Rules intended to make the option more beneficial and safer may not be immediately visible to the consumer. The individuals in this industry know that their job often includes educating people and erasing popular misconceptions about the loan type, and that job is getting somewhat easier with the increased regulations.
Here are a few ways you can educated people, increase sales, and make happy customers.
Create trust: Seniors are generally very cautious and when dealing with financial matters, and reputation is paramount. Be sure that you create a sense of trust, both in person and online. Provide them with various ways to find you and give them the information to educate themselves about you, your company and what you have to offer them. Always consider testimonials to build a trusted image for potential clients , their children and other influencers on their decision making.
Keep your message clear: Successful advertising can play a huge role in how people understand and accept reverse mortgages. Focus on the positive and address the negative evenly, respectfully, and openly. Address the most common questions related to reverse mortgages. A quick bit of research turned up the following:
- What are the benefits of a reverse mortgage?
- What are my obligations?
- Will I lose my government assistance if I get a reverse mortgage?
- What if I change my mind?
- Will I have to repay the loan?
- What is the difference between variable and fixed interest rates and are there any contingencies regarding the rates?
- What are the closing costs and how can they be affected?
Dealing with these most common questions and their accompanying misconceptions about reverse mortgages up front can give you good insight on how to message your advertising.
Stay in touch: Seniors, usually, take more time to think things over and understand things when compared to younger people. Give them their time, but don’t let them forget you are there and willing to help them in any way. Offer to send them a hard copy of any information they may want, and send an e-mail of all of the items discussed in your meeting, so they have every piece of information in front of them. Provide them with all of your contact information such as office and mobile phone, email, available websites, social-media platforms, and your office address.
Know the market: The market for reverse mortgages is getting younger. In 2012, the average age for an HECM loan borrower was 71.9, a drop of 1.2 years from 4 years before. 40.3% were single females, 21.7% were single males, and 38.1% were couples applying together; The decision is often made with input from family, friends and trusted associates, and all the ‘stakeholders’ will want information that is not only intended to increase their ability to protect the individual or couple, but also to inform themselves about the effects. You can be sure that children will have an interest in the proceedings and their opinion will be heard, but the family dynamic is different for each family.
Trend lines indicate that the aging population is seeing reverse mortgages in a more positive light. With that change will come increasing opportunities to close more deals, and the partnership between HUD and industry professionals will be crucial in portraying a stable and solid option. Baby boomers are on the way, are you ready?
By the way, here’s Fonzie talking about riding a motorcycle on Happy Days.
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