Traditionally, a reverse mortgage is where the lender pays money to an elderly homeowner for the duration of them living in the home. The homeowner must be 62 years of age and does not have to have income or very high credit scores to qualify as they are not making any monthly payments while they are occupying the home. Once the home is sold, the loan and any interest accrued is repaid.
New statistics have come out from a MetLife Mature Market Institute and National Council on Aging study showing that the interest in these reverse mortgages has now increased to the younger demogrpahic of baby boomers. In 1990, the average age of reverse mortgage borrowers was 76 while now it has dropped to 73, with 21 percent of people considering the option being from ages 62-64 years old.
Since the FHA has made reverse mortgages available at very reasonable financial standards, this younger demographic has turned to the once "older" option. Some baby boomers are looking into using reverse mortgages as a way to use their home equity for retirement planning but before you consider this option, please consult a mortgage professional. Any questions can be addressed by calling our office at 704.892.5211
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