Researchers at Ohio State conducted an in-depth study that included 1,761 participants. The goal was to interview those who had taken out the home loan and those who had not following the mandatory counseling session.
Following the counseling session, it found that 68% of borrowers went forward with the loan. 6% started the process but aborted it before closing the loan. The average age of participants was 70, with one-third being female. About 17% had earned a four-year college degree.
According to the study, 78% felt "satisfied" or "very satisfied" with their reverse mortgage. Meanwhile, 76% agreed that having a reverse mortgage improved their quality of life.
The average income of those involved in the study was $31,000 per year, or $2,600 per month, with median assets of $2,000. About 45% of the respondents said they had no assets at the time of the counseling session, with the reverse mortgage being a way for them to tap into their home's wealth.
For most people, 42%, they sought a reverse mortgage to supplement their income, while 39% wanted the loan to pay off their previous mortgage. 24% used the loan to make home improvements, while 19% wanted to use the funds to provide financial assistance for friends and family. Just 16% wanted to use it to delay tapping into other retirement income, while 14% used the loan to pay for medical costs. Only 6% said they would use the loan for big ticket purchases or vacations. A substantial 85% said their home was in good condition at the time of the loan.
As these numbers reflect, a majority of reverse mortgage borrowers intend to use the proceeds to supplement their income. As real estate wealth grows among retiring homeowners in the US, experts say that there are trillions of dollars in untapped wealth. In modern times, a reverse mortgage is being increasingly relied upon to replace pensions and help supplement retirement income. The results of this in-depth survey shouldn't be surprising whatsoever. The best news of all was that most people who take out these home loans are satisfied with all is said and done.