If college debt is a hindrance to young adults, mortgage debt is the drag on homeowners heading into retirement.
A much higher proportion of homeowners over 65 are carrying mortgage debt compared with past generations. And that debt could make it harder for them to stay in their homes.
The trend is noteworthy because the retiree population is about to get bigger. Speaking at a recent forum on the future of housing, sponsored by the
One repercussion for older borrowers is that they will have to work longer, said
Few people take advantage of this option now — only about 70,000 new reverse mortgages are originated each year, according to the
But as they struggle to cover mortgage costs along with health care bills, property taxes and home insurance, more older Americans may have to rely on reverse mortgages to remain in their homes.
The amount of mortgage debt they are carrying is not insignificant. As of 2010, the average amount of mortgage debt carried by new retirees was
Buyers of reverse mortgages have not been immune to the unscrupulous practices that put many others into loans they couldn't afford. Homeowners who don't understand the complex loan terms, or who can't maintain insurance and property tax payments, could lose their homes.
Recent rule changes announced by the
A study of people seeking reverse mortgages could help the government further revise the program.
CHARTS: INDEX FOR ADJUSTABLE RATE MORTGAGES: 1-year Treasury rate (Source: HSH.com)
|Copyright:||(c) 2013 The New York Times Company|
|Source:||New York Times Digital|