Reverse mortgages, once the province of seniors in their 70s, are attracting younger baby-boomers in the wake of the recession.
In fact, the percentage of prospective borrowers in the 62- to 64-year-old age range rose 15-percentage points in the past 13 years, the MetLife Mature Market Institute said in its reverse mortgage report this week.
The product, which is popular among older Americans, allows homeowners to convert home equity into monthly cash payments.
Even though reverse mortgages once attracted a much older age group, baby-boomers in their early sixties now make up one-in-five prospective reverse mortgage candidates, the study found.
A probe MetLife performed in conjunction with the National Council on Aging discovered the average age of those going through reverse mortgage counseling is around 71.5.
MetLife says the U.S. Department of Housing and Urban Development conducted a similar study and found the average age hovering at 73. With reverse mortgages picking up traction in lower-age categories, HUD is advising homeowners to obtain counseling before risking their home equity.
"Consumer attitudes about reverse mortgages are changing because the recession has eroded confidence about retirement security and Americans will rely more and more on these measures," said Sandra Timmermann, director of the MetLife Mature Market Institute.
"As reverse mortgages do not have income requirements and since other forms of credit have become less accessible, these loans will become more attractive," she added, "though it is worth noting that the Department of Housing and Urban Development stated recently that lenders may conduct financial assessments of applicants to ensure that they have the ability to meet their loan obligations."