According to the Bureau of Labor Statistics' most recent data on senior citizen spending habits, "older households" - those run by someone 65 or older – spend an average of $45,756 per year or approximately $3,800 monthly on all their daily expenses.
While some retirees are close to paying off their home loan or are entirely mortgage free, for many, housing continues to take the biggest bite out of monthly income. On average, 34 percent of monthly spending by seniors is on housing costs including mortgage payments or rent, property taxes, insurance, utilities, repairs and maintenance. For those already living on a tight fixed monthly income, this is a substantial sum.
Fortunately, programs like a reverse mortgage allow those 62 or older to shed some of these expenses. In addition to eliminating monthly mortgage payments, reverse mortgages can be an additional source of income in the form of a monthly payout, a lump sum or even a line of credit that can continue to grow over time.
Today, conventional conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 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.