According to the National Reverse Mortgage Lenders Association, homeowners aged 62 and older have collected over $10 million in housing wealth because of the recent growth in property values. For many retirees, the most cost-effective alternative income source comes from tapping into home equity via a reverse mortgage because the proceeds are not taxable.
According to a recent study by Finance of America Reverse, reverse mortgages can provide an essential risk mitigation tool for millions of retirees—dramatically reducing exposure to longevity and market risks while also growing their investment portfolios. It stated that retirement strategies that use a reverse mortgage as an alternative source of cash flow to a traditional investment portfolio hold the greatest benefit for Americans with $100,000 to $1.5 million in investable assets.
In 2021, the industry experienced generally heightened reverse mortgage activity stemming from the economic impact of the COVID-19 pandemic. June marked the first time in five months that the wholesale channel outperformed the retail channel. California had the most reverse mortgage originations, followed by Colorado – according to an analysis by Inside FHA/VA Lending. Through the third quarter of 2021, California had a 36.6% share of reverse mortgages, compared to Colorado’s 7.3% share.
Reverse mortgage lenders are optimistic about the increased Home Equity Conversion Mortgage (HECM) lending limit to $970,800 in 2022. The higher limit provides higher benefits to prospective borrowers and gives borrowers with a reverse mortgage an opportunity to re-qualify and obtain a new loan.
Find even more news and coverage of the reverse mortgage industry at our sister website, reversemortgagedaily.com
Mortgage Coach and ReverseVision introduced an online program that allows loan originators to give consumers a comparison of how reverse mortgages perform against traditional mortgages over the lifetime of the loan.