![]() “Reverse mortgages are complex and have the potential to become a much more pervasive product in the coming years as the baby boomer generation enters retirement,” said CFPB Director Richard Cordray. They’re also confusing, according to the Consumer Financial Protection Bureau, which released a report highlighting the risks for American consumers as they struggle to understand reverse mortgages. The biggest complaint you have regarding reverse mortgages is not the product, but that it’s expensive to grow old in America.” ![]() “I’m not saying a reverse mortgage is for everybody, but it is certainly an option that may be the most realistic for a majority of the seniors in the next five to ten years,” Norman says. These seniors aren’t going to be able to retire at a fraction of what they’re living today. “Pull up average 401(K), average savings amount, average debt. “As the baby boomers continue to age and home values stabilize, the question is ‘How are they going to retire?’’ Norman says. 01% of the home value - than the HECM Standard, but reduces the amount of money available to the borrower. He favors the Home Equity Conversion Mortgage Saver, a type of reverse mortgage offered by the Federal Housing Administration that requires drastically lower upfront fees - just. Norman says Sente Mortgage views reverse mortgages as a product with unlimited upside, a natural financial planning option for aging Americans within the housing economy. And by 2030, about 72.1 million older Americans, over twice their number in 2000, will exist - about 19% of the U.S. It projects a 36% increase to 55 million in 2020. The population of individuals 65 and up increased 15% to 40 million in 2010 from 35 million in 2000, according to the Department of Health and Human Services. The demographics point to a robust consumer base for the reverse mortgage industry. ![]() However, unlike a traditional home equity loan or second mortgage, borrowers can hold off on repayment until they no longer live in the home, fail to meet the obligations of the mortgage or pass away. Reverse mortgages let borrowers convert a portion of their home equity into cash. “We haven’t even scratched the surface yet.” “There’s still a great deal of education - for financial planners, certified public accountants, home health care professionals, real estate attorneys - that needs to be done,” Norman says. Norman says the forces of supply & demand and education will serve as the engine for his prediction’s materialization that every extended family will have a member with a reverse mortgage. ![]() Reverse mortgages will be as ubiquitous as individual retirement accounts in 10 years because many folks will have more money in the former than in the latter, says Scott Norman, vice president of Austin, Texas-based Sente Mortgage‘s reverse mortgage division. ![]()
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