As home prices continue to climb nationwide, the net worth of the American homeowner is growing as well. According to a report released last week by the Urban Institute, Americans have on average about $150,506 invested in their home. This is calculated by considering the amount of mortgage debt remaining after subtracting the home's value.
The report signaled that a home comprises the majority of Americans' wealth. Senior citizens generally had the greatest net worth as they have had longer to pay down their mortgage as well as save throughout their careers. Fifty-two percent of all home equity is currently held by those over 60, an indication of why the popularity of reverse mortgages continues to rise.
A reverse mortgage allows those 62 or older to use the equity in their home to eliminate monthly mortgage payments and fund their longevity. Additionally, borrowers can receive extra cash in the form of monthly payments, a lump sum or line of credit.
Meanwhile, conventional conforming no-point 30-year fixed rates average 3.375 percent while the 15-year rate is near 2.625 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.