On the heels of some positive mainstream reverse mortgage media coverage this week, a Forbes article following the release of a MetLife Mature Market Institute study says that the survey finding “spells trouble.”
The trend of younger borrowers taking reverse mortgages—now at roughly one in five borrowers between the ages of 62 and 64—may be putting those borrowers at risk, the article states.
“If they don’t have other retirement assets and they’re spending down the equity in their house, these ‘young’ reverse mortgage borrowers are putting themselves at great risk down the line,” Forbes writes.
The report subtly sounds an alarm to all prospective borrowers: “To the extent that they decide to tap home equity today, this resource will not be available to meet future needs. The decision that these aging homeowners make will therefore have long-term consequences for their retirement security.” And a more direct warning targeted toward big spenders who are saddled with debt: “These homeowners might be better served if they resolved their financial problems now, rather than deferring them through a reverse mortgage loan with interest to the future.”
View the original Forbes article.
Written by Elizabeth Ecker