Despite concerns from consumer advocates about the suitability of reverse mortgages, results from a new poll show that almost 75 percent of reverse mortgage borrowers described their experience as a positive one.
The data comes from a survey conducted by Marttila Strategies on behalf of the National Reverse Mortgage Lenders Association which polled 600 consumers with reverse mortgages. Of those borrowers, 43 percent of respondents declared they had a maximum level of satisfaction with the whole experience.
The scope of the survey expanded beyond reverse mortgage borrowers and reached a total of 1,800 seniors and their adult children in October. The results reveal the economic recession has impacted older Americans so much that nearly 50 percent worry they will not have enough money to support themselves in retirement.
“This survey confirms that seniors are experiencing significant anxiety about the economy, funding their retirement, and their ability to meet even the most basic needs,” said John Marttila of Marttila Strategies. “This includes remaining in their homes and keeping up with living expenses.”
Survey results show that more than 80 percent of respondents said they would like to stay in their homes throughout the retirement years, but one in four seniors believe they will not be able to cover their monthly expenses to stay in their home without additional cash flow.
In addition, given their concerns about the ability to afford monthly expenses, both seniors and adult children with aging parents agreed that the current economic climate, the wisest financial strategy is to use income and assets to cover living costs rather than leave an inheritance for the next generation.
“Without increased social security benefits, retirement funding will need to come from seniors’ own personal resources,” said Peter Bell, president of the National Reverse Mortgage Lenders Association (NRMLA). “In light of reduced stock and bond portfolios, seniors will have to consider other asset pools, including the use of home equity, to help fill this financial shortfall.”
Results also showed that seniors with reverse mortgages fully grasped the financial terms associated with the product, with 75 percent saying they understood the financial terms well or very well. Finally, 90 percent of all seniors who selected a reverse mortgage as a retirement security solution felt no sales pressure, and the same proportion indicated they were more than adequately informed about this financial product.
“This research validates that seniors with reverse mortgages are pleased with their loans and with the experience of obtaining them,” Bell said. “Clearly, reverse mortgages are an effective tool to enhance borrower retirement security and quality of life.”
More evidence that reverse mortgages could be used as a way to fund home health care.
In this commentary, NRMLA President Steve Irwin offers the reverse mortgage industry a look at the issues the association is currently examining.