Reverse Mortgages In The News

Two major news organizations published articles this week about reverse mortgages, CNBC and The Washington Post. Both are noteworthy because it is an indication that reverse mortgages are getting more mainstream and gaining in popularity. Each of the articles takes a look at the current trend in the reverse mortgage market and they both point out that more people at a younger age are turning to these home equity loans than ever before.

“Finding themselves financially strapped, more seniors at an earlier age are trying to get reverse mortgages on their homes in order to survive, according to a new report.

The study says the percentage of people aged 62 to 64 applying for reverse mortgages has increased 15 percent since 1999.

The reason for the dramatic upswing among ‘younger’ seniors is simple, the report concludes:  They need the money.”

The CNBC story also cites a study recently completed by the Metlife Mature Market Institute to explain some of the possible reasons younger people are making use of reverse mortgages.  A few of the key findings from the study are:

“While the average age of borrowers is 73, 46% of homeowners considering a reverse mortgage are under age 70.

Among those who received HUD-approved counseling for reverse mortgages in 2010, 67% indicated they wanted to lower household debt, while only 27% were doing so to enhance their lifestyles.

About two-thirds (67%) of those receiving reverse mortgage counseling have a conventional mortgage that will need to be repaid if they decide to take a reverse mortgage.

About one in four (27%) are dealing with housing and non-housing debt and those with sizable existing debt may rapidly deplete home equity.”

 

It is  noteworthy that these news stories also point out that more Financial Planners are getting on board in recommending reverse mortgages to their clients as part of  their long term retirement plan.  Another sign that Reverse Mortgages are losing the stigma of only being a loan of last resort.”

You can read both of the complete articles here:  CNBC   –  “More Seniors Using Reverse Mortgages to Raise Cash”   The Washington Post – “Reverse Mortgages can be Beneficial, if You Know How to Use Them.”

 

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