Wednesday, May 09, 2012

Reverse mortgage borrowers are getting younger.

As a counterpoint to the previous blog posting.

I have just read an item on the web site (reverse mortgage daily) - can you believe it there is a daily web mag about reverse mortgages. For Brits, this is the same as equity release.

The headline says it all - customers are getting younger.

What does this mean? It means that more younger-old are having to open the piggy bank of cash that is stored in the property to fund their early retirement years. This is bad, bad news.

If any policy makers read this blog then this should sound big warning bells. Right now there is an assumption that large numbers of older people are going to be able to partly fund their care needs by selling their properties. What happens if a lot of that wealth is consumed post-retirement and before they need to spend it on care? That is what is and will increasingly happen.

Better get back to the Excel model and see what does to the sums. Dick Stroud

No comments: