Why Reverse Mortgages are Popular
Reverse mortgages have been around for decades; however, reverse mortgage loans have garnered much more popularity and attention in recent years. In fact, the number of reverse home mortgages issued in 2007 doubled those the number issued in 2006. Now advertisements for these loans are seemingly everywhere. Many reverse mortgage companies have even employed celebrity spokespersons.
Why have reverse home mortgages become so popular? The answer could lie in the results of the 2006 U.S. Census. Here are some points from the census result’s report that directly relate to why more elderly homeowners are seeking reverse mortgage information than ever before:
People Are Living Longer. According to the report, Americans are living longer, healthier lives. While this is obviously good news, longer life after retirement also means that pension plans are being altered or delayed. Because life expectancy could quite possible increase further, many more seniors are likely to run out of retirement funds.
The Senior Population is Growing. The census report also mentions the growing senior population in America. Many estimate that the senior population will double in the next 25 years. More citizens that are retired could also mean more homeowners left without substantial pension plans.
Baby Boomers Are Eligible for Social Security. Many baby boomers are turning 62 and are now eligible for social security benefits. This is the same age requirement for a reverse equity mortgage. For this reason, senior reverse mortgages are currently being heavily marketed to baby boomers.
Anxiety about Retirement. Recent studies show that as much as half of the population feels unprepared for retirement. According to a recent national retirement survey, about three quarters of U.S. workers plan to work at least part-time during their golden years.
All these factors contribute to the recent surge of popularity for reverse mortgage loans. Older Americans fear running out of their social security benefits. They are anxious about their lack of savings. This fear and anxiety is causing many seniors to seek out new possibilities for supplementing their retirement.
The good news for many senior homeowners lies in the affordability of a reverse mortgage, because these loans require very little to no out-of-pocket expense for the borrower.