While the competitive nature of alternative home equity tapping tools and reverse mortgages seems to draw the two options against each other, there are some professionals who believe the two can coexist.
"While the solution Hometap offers could be appealing to some people who could be in a similar situation to a prospective reverse mortgage borrower, it has some features that don’t put it in the same overall arena," said Jeffrey Glass, CEO of Hometap, according to Reverse Mortgage Daily.
"What we do is we offer a homeowner capital, today. And in exchange, what we take is a percentage of the future value of their home when they settle with us, which is down the line when they either sell or refinance or choose to buy us out, and that’s when we receive our settlement."
The difference between Hometap's product and reverse mortgages is the demographic. Hometap's products are normally tailored for those between ages 45 and 55, according to the report. Furthermore, they also see it as a short-term solution rater than the long-time solution for older borrowers.
"I don’t think we’re a competitor to reverse mortgages," said Glass, according to RMD.
"It’s definitely at best adjacent, and in some ways complementary. I think a reverse mortgage product is really compelling for a segment of American seniors, and has a different value proposition than that which Hometap offers. So, I don’t I don’t really see us as competitive. As I said, our typical age bucket tends to be somewhat younger, as well."
To learn more about how reverse mortgage and alternative home equity prodcuts can coexist, click on the image above.