The reverse mortgage market is poised for a boom once people better understand the products, writes syndicated financial columnist Tom Kelly in an article published last week.
A “significant” percentage of older adults and their children will consider a reverse mortgage, as they enter retirement and find they can stay in their homes cash free. The unwanted alternative—where will they go if not staying in their homes—is a question most simply don’t an answer to, Kelly says.
The article appeared in Ohio publication Akron.com. Kelly writes:
“A significant percentage of older homeowners, plus their children — the 79 million baby boomers who are now asking financial and lifestyle questions for their parents — will consider a reverse mortgage as a viable opportunity in their life.
Why? Older people primarily want to stay in their homes, and the cash in their primary residences can help them stay there so they do not have to move to a retirement home. The bigger question becomes what happens if these huge groups do not stay in their homes or age in place? Where would we put them and how could we possibly fund such volume? Toss in the idea that people are living 30 years longer than they did 40 years ago and the potential shelter/care components become enormous.
…More seniors also are figuring out that their children have their own homes and don’t need the parents’ home. Those that do anticipate a child or grandchild’s need are acting sooner.
There are many people who took out a reverse mortgage for a specific use other than last-minute desperation. For example, there’s a grandmother in Georgetown, D.C., who took out a reverse mortgage on her million-dollar home and gave her two daughters $200,000 apiece so they could use the money now, “when they needed it for their own children,” instead of getting the cash later in her estate when the grandchildren had grown and moved on. Or, the senior living near Boston, widowed at a young age, who got a reverse mortgage to put her daughter through nursing school. An Oregon man, still working at age 68, used the cash from a reverse mortgage to buy a flatbed truck that would carry the long sticks of PVC pipe needed for his sprinkler business.”
Read the original article.
Written by Elizabeth Ecker
