Friday, August 3, 2012
Three More Reasons Reverse Mortgage Popularity Will Increase
The 231-page reverse mortgage report by the Consumer Financial Protection Bureau (CFPB) brought up some interesting information about the number of seniors who actually have a reverse mortgage and why they may be joined by many more soon.
According to the CFPB's report, the reverse mortgage, more formally known as the Home Equity Conversion Mortgage (HECM), has yet to reach the vast market of eligible senior homeowners. In 2010, only around 3 percent of the 24 million qualified senior homeowners took advantage of the loan program averaging about 70 thousand newly originated reverse mortgages a year. This was down more than 30 thousand from 2009!
Some developments are, however, expected to change the trend.
Firstly, reverse mortgage-qualified baby boomers are growing in numbers. From the estimated 24 million in 2010, it is up to 32 million in 2012. That's a 33 percent increase or additional 8 million qualified senior homeowners in two years.
Secondly, the report released by the Office of the Chief Actuary in May regarding the possibility that the Social Security Administration may not be able to live up to its promised benefits brought some chilling effect. Seniors, financial planners and even organizations into retirement research started looking for ways to prepare for the coming of this anxiety-causing event.
The third development is tied with the second one. After Social Security, home equity is the largest asset of a typical senior in the country. With the hope of addressing the Social Security's pending deficit, a growing number of financial and retirement planners started looking at the reverse mortgage closely and acknowledged its potential to boost retirement preparedness.
With the economy not looking like it will improve anytime soon, now may be the best time to look into a reverse mortgage to help protect your future. For more information on the reverse mortgage and to see if you qualify, visit our main reverse mortgage website.
Portions on this post were cited from the article "A Personal Take on the CFPB's Reverse Mortgage Report"