Reverse mortgages are popular not just in the United States, but also in Great Britain, Canada, Australia and a number of other countries. According to a recent article in The Telegraph, a newspaper that is popular in London:
“Pensioners are being left with little choice than to take out equity release mortgages to top up their insufficient pensions. Figures from Just Retirement, which has about a third of the equity release mortgage market, show that its customers now represent a broad swathe of Britain, rather than equity release being a perk for the rich.
“Where we previously saw a focus on the most affluent social group, this has now been replaced by a profile that is far more in line with UK norms,” said Stephen Lowe, a Just Retirement director. “Equity release is being used as a way to help customers top up their retirement income in response to falling annuity rates and increasing costs of living.””
It is interesting to see that reverse mortgages are becoming more popular, even gaining a reputation for the middle-class. No more is it just the financial planning tool for the well-to-do in Britain. That is also a trend seen in many countries where the wealthiest have access to a wide array of financial strategies, while the less affluent have limited tools.
The same is true in America with hedge funds, where investors need at least $1 million in assets and an income of at least $200,000 a year to invest in the most expensive investment class available. Almost any other financial planning tool is widely available to anyone in America, however, reverse mortgages are available only to home owners who are at least 62 years old.
To help the wealthiest and less wealthy understand the benefits of a reverse mortgage, independent financial counseling and education are part of the application process. This makes reverse mortgages unlike any other financial instrument since they are only available to informed consumers. If those with $1 million portfolios understood that most hedge funds underperform the average mutual fund, they might not be willing to spend two to five times as much in fees for their investment.
We don’t believe that all financial instruments will offer the level of consumer safeguards found in reverse mortgages anytime soon, but it would level the playing field in many ways if they did. We do believe that Americans from across the financial spectrum have taken advantage of reverse mortgages and they have not been limited to the most affluent groups in this country.
To learn how you can join those using their home as a source of income, contact us today at 1-800-991-4613.