Reverse mortgages still relatively underused

Posted by at 10:17 am

  Despite several high-profile marketing campaigns, fewer than a million federally-insured Home Equity Conversion Mortgage (HECM) loans – reverse mortgages – have been written since the program debuted in 1990. Only 1 million in more than 25 years. Think about that. There were 24 million homeowners older than 65 living in the United States at the end of 2015! Not a whole lot for a remarkably innovative retirement planning tool. Consider this Studies show 41 percent of Americans ages 55 to 64 have little or no retirement savings, enough to be labeled a “crisis” by the Employee Benefit Research Institute. But nearly 75 percent of older Americans own homes and have equity in them. The HECM is simply a loan against the equity you’ve earned in the house. The reverse mortgage is available to seniors whether they own the home...
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Young homebuyers crunched

Posted by at 12:07 pm

  When existing homeowners don’t sell, and non-homeowners want to buy in, the laws of supply and demand dictate prices must rise. The backup can reverberate throughout the rest of the market. Many potential buyers – whether first-timers or move-ups – can get caught in an inventory crunch. The real problem behind market imbalance is fewer existing homeowners selling: Some are underwater and can’t afford to. Others simply don’t want to. Cut to the chase “Market chasers” are in the latter group. Whether consciously or not, they wait to see how high prices will go. Research finds the most powerful emotional drive at work in a sale is the perception you might lose out on getting the highest possible return. The thought process is they’ll wait until the market “tops out” before they list. Usually, it’s not going to work,...
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