Author:
Baily Martin Neil,Harris Benjamin H.
Abstract
AbstractMany families have savings in financial assets but considerable wealth as home equity. They can sell the house, but then the family must find another place to live. Naturally, some retirees want to remain in their own homes and “age in place.” Reverse mortgages were created to help older people remain in their homes, using their home equity for support. With a reverse mortgage, the homeowner takes out an interest-accruing loan against the value of the house but does not make interest payments until the homeowner dies or decides to leave their home. Reverse mortgages can be an appealing product to access home equity, although the market suffers from reputational challenges and widespread design flaws. This chapter explores the reverse mortgage market, its pros and cons, and how to make it more attractive to retirees while reducing the risks of loan default.
Publisher
Oxford University PressNew York
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