Private sector pensions have largely disappeared, increasing the reliance of seniors on Social Security for retirement funding. Approximately 73% of seniors rely on Social Security for more than half of their income, with 39% depending on it entirely. Cost-of-living adjustments fall short of covering actual inflation incurred by seniors, particularly in housing and transportation. Reverse mortgage products like Home Equity Conversion Mortgages (HECM) are being promoted to assist seniors in managing increased costs, with new offerings that provide flexible access to home equity without preset maturity dates.
Nearly 73% of seniors depend on Social Security for more than half their income, with 39% of respondents reporting that it was their sole source of retirement income.
Housing and transportation costs have increased faster than inflation over the last 15 years, which is especially difficult for seniors who rent their homes or live in areas with low walkability.
Reverse mortgage lenders for years have been beating the drum that a Home Equity Conversion Mortgage (HECM) product could benefit seniors struggling with increased costs and fixed incomes.
The new product allows borrowers to access between $50,000 and $400,000 per draw at a fixed rate, depending on factors like home value, lien position, title, credit profile, verified income amount and available equity at the time of application.
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