Once considered a rite of passage for retirees, paying off a mortgage is growing far less frequent according to a new study by Fannie Mae. Among other insights, the study reveals that the eldest Baby Boomers, those who have past retirement age, are far less likely than the generation before them to be mortgage-free.
"Among Baby Boomer[s] aged 65 to 69 in 2015, fewer than 50 percent were mortgage-free, down 10 percentage points compared with the pre-Boomer group of homeowners who were the same age in 2000," the report claims. "Given that income typically declines in retirement, monthly mortgage payments could stretch the household budgets of Boomers who exit the labor force without first extinguishing their housing debts."
Fortunately, programs like reverse mortgages are designed to address this very issue. By tapping home equity through a reverse mortgage, Boomers can eliminate monthly mortgage payments while creating an additional income stream in the form of a monthly payout, a lump sum or a line of credit.
Today, conventional conforming no-point 30-year fixed mortgage rates are averaging 4 percent while 15-year rates near 3.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.