Reverse mortgages: What homeowners (don’t) know and how it matters
Reverse mortgages help elderly homeowners to unlock and consume home equity while continuing residing in their homes. Demand for reverse mortgage is far behind predictions.
Based on a survey of U.S. homeowners aged 58+ we assess product knowledge (literacy) and its relation to reverse mortgage demand. Awareness of the product is very high while knowledge is fairly low. Lack of product knowledge relates to low interest in the product. Knowing peers who have a reverse mortgage increases interest. Respondents that would benefit most from reverse mortgages (lower income, insufficient savings) are more likely to accept a reverse mortgage.
However, those respondents do not have good knowledge about the product.