More seniors in the US are getting reverse mortgages on their properties at an earlier age, in order to survive.
A study revealed that since 1999, the percentage of people aged between 62 and 64 applying for reverse mortgages climbed 15 percent. The reason for the significant upswing among “younger” seniors is simple — they need the money.
“The average age for taking out reverse mortgages has been around 71,” said Sandy Timmerman, Director of the MetLife Market Institute, which conducted the survey with the National Council on Aging.
“But with job losses, higher debt and living costs, more and more of the ‘younger’ seniors are looking at reverse mortgages as a way to pay their bills and keep their homes,” noted Timmerman.
“It shows the devastation some seniors have gone through since the financial downturn.”
Reverse mortgages allow homeowners to acquire loans secured with the value of their homes. They have been in existence since the 1960s and have now become attractive to more seniors.
In 2010 alone, over 80,000 Americans aged 62 and above finalised reverse mortgages, up from 25,000 in 1995.
“It’s not surprising that more seniors are doing this at an earlier age,” said Karl Byrd, Vice President at Security Ballew Wealth Management.
“We live in a time when people are not planning for their retirement or can even get out of debt. Some seniors can’t even buy groceries right now.”
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