Reverse Mortgage Borrowers Are Getting Younger

During the past few months 62-year-olds have been the most comment reverse mortgage borrowers. Bank of America’s John Nixon recently did an analysis of the most common reverse mortgage age at his bank, according Reverse Mortgage Insight, who then did an analysis that found that trend reflected in the broader industry.

Reverse Mortgage Age Drops

Borrowers must be at least 62 to get a reverse home mortgage. According to the Reverse Mortgage Insight article:

Many of us who have been in the industry for a while have watched average age drop from 77 a decade ago, to 74 five years ago and roughly 72 last year. What has been masked by that “average” (or mean for the mathematically precise amongst us) is that the number of borrowers at each age has changed dramatically. John mentioned that in the past few months, 62-year-olds were the most common among his borrowers, which frankly shocked many folks in the audience [at the National Reverse Mortgage Lenders Association Irvine Roadshow].

Unemployment Among Boomers

What’s going on? Why are more younger borrowers turning to reverse loans? There are a variety of reasons, but the troubled economy is obviously a huge factor. Many baby boomers have been laid off from jobs and are having trouble finding employment. Also, many homeowners have found it difficult to sell homes in order to avoid foreclosure.

Not Enough Retirement Funds

Retirement benefits have also been hit hard during the recession, leaving many older Americans scrambling to piece together a comfortable retirement. The Employee Benefit Research Institute recently said that about 64% of Americans in the two lowest pre-retirement income levels are expected to run short of money after 10 years in retirement. About 29% of those in the next-to-highest income level and 13% of those in the highest-income level are expected to run short of money after 20 years.

To find out if a reverse mortgage can help your situation, schedule an appointment with a housing counselor approved by the Department of Housing and Urban Development. Take time to gather all the facts before signing up for a loan.

This entry was posted on Monday, July 26th, 2010 at 6:43 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.