The data is in: Older homeowners may need relief

A recent Lending Tree survey examined the latest data from the U.S. Census Bureau to see how many homeowners still have a mortgage. The data was drawn from the nation’s 50 largest metro areas. What they found is 19% of homeowners 65 and older are still making monthly mortgage payments. As inflation continues to prove a stubborn economic drag on the pocketbooks of Americans, it’s safe to assume many of these homeowners find their monthly mortgage payment a significant burden to their monthly cash flow.

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According to the firm Personal Capital, the average mortgage holder in their 60s has a mortgage balance of $243,000. Experian’s Annual State of Credit report found Baby Boomers aged 57-75 carry an average mortgage balance of $198,000 while those 76 and older have a smaller average balance of $163,000. 

The slump in reverse mortgage volume following the end of the boom in reverse mortgage refinances has left many originators wondering if there’s still significant demand for the loan among older homeowners. The data would appear to indicate there is both a need and potential demand to possibly eliminate one’s required mortgage payments. 

While many intend to pay off their mortgage prior to retirement, the reality is many are unable to accomplish this goal for a number of reasons. Job losses, health emergencies, financially assisting family members, and financial shocks are just a few likely hurdles to being mortgage-free in retirement. 

The pivotal question is what percentage of the home’s present value is encumbered with mortgage debt. The answer is it depends on your market. For example, San Diego, Miami, and Las Vegas led the way with the largest share of 65-and-over homeowners with a mortgage. Almost 24 percent of homeowners in these areas are still paying off mortgage debt. Conversely, Salt Lake City, Austin, and Dallas had the smallest share of the 65-plus crowd owing money on their homes. Just shy of 14 percent of them still have mortgages.

Are seniors averse to getting a new mortgage? Not necessarily. The Epoch Times reports Nancy Meserole, manager at A.S.A.P. Mortgage in New York state that many of her clients are 65 and older. Meserole noted. “Age has no bearing on someone getting a mortgage. Even if someone is 90 years old and qualifies, he or she will get the mortgage.”

Jacob Channel, senior economic analyst at LendingTree said, “Because the conventional wisdom is that a person should pay off their mortgage before they reach retirement age, I was initially surprised at just how many people in their mid-60s and beyond still had a mortgage. But when I started to look deeper at the figures and thought about how expensive housing has gotten and how many people can’t afford a home until later in life, the numbers started to make a lot of sense.” Channel found that about 9.6 million homeowners 65 and older have a mortgage, while more than 16 million (16,184,634) don’t.

What’s becoming clear is despite the sudden curtailment of reverse mortgage loan volume a bonafide need for mortgage relief remains. The challenge, as always, remains in reaching this segment of homeowners while overcoming entrenched misconceptions and public bias against one of the most unique and flexible mortgages in American finance.

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