Demand for reverse mortgages will likely accelerate in September or October when the big banks’ six-month payment deferral programs begin tapering off, according to Yvonne Ziomecki, executive vice president of marketing and sales at HomeEquity Bank.
Much of this pent-up demand will stem from older business owners whose ventures were adversely affected by the government-mandated lockdowns and social distancing measures.
Seniors who have previously bet on the stock market, and are now wrestling with the consequences of the coronavirus-induced crash, will likely borrow using their homes, as well.
“These people need to find a way to get through three to six months and then figure out if they’re going to be able to stay in business or get a job,” Ziomecki told Global News.
“This demographic needs cash flow to live on,” said Sue Pimento, district vice president (central Canada) with HomeEquity Bank. “They are scared and have few choices or options. Then they watch their family members lose jobs or try to get by on reduced incomes and they, quite naturally, want to help. They need cash flow more than ever.”
Paul von Martels, vice president of prime and reverse mortgage lending at Equitable Bank, recently said that the coronavirus pandemic has stressed the need for real estate liquidity.
“The COVID-19 situation has highlighted key advantages of having your own home. And, more and more, businesses will keep emerging to provide critical home delivery-like services to help people live more efficient, comfortable, and independent lives on their own,” von Martels said. “It creates a real opportunity.”