Baby Boomers Turning Back to Reverse Mortgages for Income


Peter Rudegeair and Michelle Conlin
Reuters
March 17, 2014

Photo by TheTruthAbout, via Flickr

Photo by TheTruthAbout, via Flickr

U.S. baby boomers desperate for retirement income are increasingly turning back to a financial product that, after the housing bust, had been left for dead: the reverse mortgage.

Many retirees haven’t saved enough to cover expenses for the rest of their lives. But many of them have one major asset – a home. A reverse mortgage allows them to borrow against that, and they don’t have to make any payments on the loan until they move or die.

Borrowers took out $15.3 billion of the loans in 2013, an increase of 20 percent from the year before, according to industry publication Inside Mortgage Finance. The record year was 2009, when there were $30.21 billion of reverse mortgage loans made.

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