Although the amount of equity that is retained by American seniors exceeds 5 Trillion dollars, there are many who will not be able to retire because they are burdened with a mortgage payment.
Unfortunately, some seniors applied for Lines-of-Credit or did a traditional refinance on their property and took a lot of funds out at the close of escrow the last several years.
A much better option would have been to apply for the HECM Line-of-Credit and only use the funds as needed and not be obligated for a money mortgage payment.
A new report was recently published by HUD’s office of Policy Development and Research discussing this concern and what options seniors will have in the future to manage their housing debt.
I will post a summary of the findings in the next three posts.
HUD: Reverse Mortgages Provide Solution to Retirees’ Housing Needs
By Jason Oliva
“Baby Boomers and senior homeowners have the potential to reshape the nation’s housing market. But as a growing share of this demographic carries mortgage debt into retirement, they will need to seek additional solutions to improve their financial situations. For many, this could mean tapping into home equity through a reverse mortgage, according to a new report from the Department of Housing and Urban Development.
The broader housing market has shown positive signs of recovery in the years following the financial crisis, but several challenges remain, especially for older homeowners nearing retirement, according to a report recently issued by HUD’s Office of Policy Development and Research.
A rising percentage of older homeowners are carrying mortgage debt as they approach and enter retirement. Among owners aged 65 and older, 40% had mortgages in 2014, according to the Joint Center for Housing Studies of Harvard University.”