Reverse mortgage lender American Advisors Group (AAG) is expanding into traditional mortgage lending, the company has announced.
AAG began offering traditional mortgages and residential services in a pilot program last yearm as a way to provide its customers additional ways to access their home equity.
“For many retirees, income from savings and retirement accounts isn’t enough to cover expenses, and they experience a significant drop in their quality of life,” said Reza Jahangiri, CEO of AAG. “At the same time, older Americans have amassed over $6.5 trillion in home equity. What we’ve seen is that when seniors include home equity in their retirement planning, proactively, they have better outcomes. And by providing a variety of options for accessing home equity, AAG is better able to serve our customers, especially those entering or in retirement.”
AAG interacts with more than 400,000 seniors every year. Last year, the company set up what it called a “test kitchen” to begin testing the demand for traditional mortgages among its customer base. The company said that it found that for many seniors, a reverse mortgage was “not the right fit” as a vehicle for tapping home equity.
“AAG’s new traditional mortgage option is designed for customers who are not eligible or choose not to move forward with a reverse mortgage loan, but want to use their home equity to achieve a better retirement,” said Paul Fiore, AAG chief sales officer.
As part of its expansion into traditional mortgage lending, AAG has leased an 11,037-square-foot office in the Sacramento, Calif., area.
“Expanding to Sacramento gives us access to a tremendous talent pool of experienced mortgage professionals, as well as sales professionals that we can train,” Fiore said.