Golden Gateway released new usage data from its online reverse mortgage calculator that showed seniors are increasingly considering larger up front payments as opposed to more substantial monthly payments.
Data from the second quarter of 2009 shows similar numbers in terms of the types of individuals researching reverse mortgages. Average age of users, the percentage with forward mortgages, and current self-reported home values all remained relatively flat between the first and second quarters of 2009.
The one notable change was in how people are considering receiving their reverse mortgage proceeds. For those considering a larger up front payment, the amount continues to grow with an increase of more than $12,000 from the second quarter of 2008 to this year. For those considering a monthly term payout, the amount they are planning to withdraw each month decreased by nearly 50 percent in that same period.
"As we approach what appears to be the bottom in the housing market for seniors, the new reverse mortgage loan limit and a home price rebound means many could gain more now from a reverse mortgage than ever before," said Eric Bachman, founder and CEO of Golden Gateway Financial. "It’s also evident that many of these same seniors are still feeling economic pressure and hope to alleviate it in the near term by taking larger up front payments and smaller monthly amounts."
Additional observations from the data include:
- Age and other determining factors remained roughly consistent, while home values dropped by 1.4%, or an average of nearly $6,000, on a national average between the first and second quarters of 2009
- The percentage of borrowers with a forward mortgage remained almost identical, meaning there is potentially an even split between those researching a reverse mortgage for reasons related to their homes versus their investment portfolio
- The amount of max up front payment available increased by 4.8% between the first and second quarter of 2009, and by 8.2% from the second quarter of 2008
- The amount of max monthly payments available decreased by 2.9% between the first two quarters of this year, and by 48% between the second quarters of 2008 and 2009