Reverse Mortgage Statistics Show Widening Appeal

House prices have declined steeply over the past couple years, no doubt, leaving 21 percent of homeowners with no or negative equity, according to Zillow.com. But some people still have plenty of equity: seniors.

Of late, many seniors have been using that equity to increase quality of life, pay for medical costs, or satisfy some other financial desire. Reverse mortgages have gone mainstream. Since 1961, according to AARP, approximately 350,000 reverse mortgages have been financed. Two thirds of that total has occurred in the last four years.

The total of HECM reverse mortgages–the main government-backed form of reverse mortgage–went from 157 in 1991 to 55,659 in 2006.

The reverse mortgage has lost its stigma as a decision made by seniors who really need the money. Now, a reverse mortgage is viewed as a viable option, especially in light of recent stock market volatility.

More mortgage brokers are getting into the reverse mortgage business as well, due to this increased demand. Reverse mortgage quotes are much easier to find and more reliable than in days past.

As word of mouth travels, it’s to be expected that more seniors will take a hard look at the reverse mortgage option.