WESTPORT, Conn. (UPI) — Twenty percent of U.S. adults who get a reverse mortgage are baby boomers ages 62-64, a much younger demographic than before, insurance officials said.
Sandra Timmermann, director of the MetLife Mature Market Institute, said the special types of home loans that allow people to get payments from their home equity, evolved as a way to help seniors manage urgent financial needs, but the recession and the difficulty in getting credit resulted in more seniors considering a reverse mortgage beginning at age 62.
Using home equity as more than a “last resort” can help keep cash shortfalls from becoming major problems, but the growing trend toward borrowing at earlier ages also raises concerns, Timmermann said.
Aging baby boomers — likely to live longer than their parents — might not have saved enough for their additional retirement years and these seniors might need to preserve a portion of their home equity for later, Timmermann said.
The report, “Changing Attitudes, Changing Motives: The MetLife Study of How Aging Homeowners Use Reverse Mortgages,” produced with the National Council on Aging, reported that the average age of those who have gone through reverse mortgage counseling has declined to age 71.5.
In addition, 46 percent of homeowners considering a reverse mortgage was age 70 and under.
The study concluded that older homeowners will need assistance and consumer education to ensure that they make wise decisions about the most appropriate use of their “nest egg” of home equity, Timmermann added.
The report can be downloaded from www.MatureMarketInstitute.com