Reverse Mortgage Surge Expected
There are, at the present time, 32 million people in the United States over the age of 65. Thirteen years from now, the U.S. Census Bureau says there will be 40 million over age 65.Almost 80% of these seniors own their own homes.
Added to these facts is the knowledge that two million of these senior citizens move each year. And the experts say more would move if they had the funds to do so.
All this adds up to Fannie Mae attempting to fill a gap in the marketplace by designing new products for the seniors market.
Their new loans will enable the customer to buy a home without eitherincurring a monthly mortgage payment or funding the entire purchase with cash. They are, essentially, a deferred-payment mortgage, requiring a large down-payment.
Many feel this to be a virtually untapped market, and the creators of the new loans are hoping for widespread acceptance and activity.
Others say it's "too complicated" to work.
It will be interesting to see who's right!
Copyright © 1997 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 7, No. 8, 7/97
First published on 07/01/1997