The Financial Tool Builders Need to Offer Baby Boomer Buyers to Counter Market Challenges

By Geoffrey Wallace

Rising interest rates have caused an increase in monthly mortgage payments for builders’ baby boomer clients who are still awaiting the completion of their homes, and Mutual of Omaha Mortgage is uniquely positioned to provide the solution.

Builders are faced with customers canceling their contracts and new buyers not able to purchase a new home because they are no longer able to qualify, or the monthly mortgage payments are simply too high. To compensate for these market changes, builders are under pressure to reduce sale prices.

This is where the unique financial products offered by Mutual of Omaha Mortgage can help.

Mutual of Omaha Mortgage’s Lifestyle Home Loan may be the solution baby boomers need to offset the cost of increased interest rates and the increased monthly mortgage payments that come with them.

The Lifestyle Home Loan is a home equity conversion mortgage for purchase (HECM for purchase or reverse mortgage for purchase).

This is how it works: after making a down payment from the sale of their previous home, the baby boomer home buyers finance the remaining purchase price with a Lifestyle Home Loan.

A Lifestyle Home Loan allows homeowners to purchase a new home without taking on any monthly mortgage payments, making the new purchase significantly more affordable.

This helps qualifying homeowners by significantly increasing their buying power by allowing them to stay in contract or keep their upgrades. It also helps to stabilize monthly cash flow requirements — even in a rising interest rate environment. In addition, it provides long-term lock protection with no additional costs.

Mutual of Omaha Mortgage is best positioned in the industry for builders looking to counter market challenges, maximize revenue, and control the customer experience with baby boomers.

Mutual of Omaha Mortgage is the current top HECM for purchase leader in the industry, according to Reverse Market Insight. In addition, it’s also a Fortune 300 company, and one of the most respected brands. It’s highly experienced and educated sales force is licensed to originate loans in 48 states. And most importantly, Mutual of Omaha Mortgage can structure unique ways to assist each builder and their clients.

Baby boomers made up 39% of home buyers in 2022, a 10% increase from the previous year, according to a report released by the National Association of Realtors. NAR’s 2023 Generational Trends report found that boomers surpassed millennials as the generation who owns the most homes.

“Baby boomers have the upper hand in the homebuying market,” Jessica Lautz, NAR’s Deputy Chief Economist and Vice President of research, said in a statement. “The majority of them are repeat buyers who have housing equity to propel them into their dream home – be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life.”

This report shows that baby boomers, who range from age 58 to 76, are an important generation in this environment who is uniquely positioned to take advantage of Mutual’s Lifestyle Home Loan.

Lifestyle Home Loan borrowers must occupy their home as their primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.

Geoffrey Wallace is the Director of Strategic Business at Mutual of Omaha Mortgage. Reach out to Wallace to learn more about how to offer Mutual’s Lifestyle Loan to your clients looking to purchase a new build.


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About the Author: Guest Author