As of July 1, 2006 the U.S. census bureau reports that the resident population of persons age 65 and over was 37.2 million. By 2015, that number is expected to rise to 46.8 million; and by 2020 to 54.6 million.
Residents of Illinois over age 65 on July 1, 2006 numbered 1.5 million (or about 12% of the state’s total population). By 2015, their numbers will grow to 1.78 million (or 13.6% of total population).
Nationwide, almost 81% of persons 65 and older own their home. As of the fall of 2005 that number was 17,818,000. Of those, over 12 million own their homes free and clear. That is, they enjoy 100% equity in their real estate. When you consider that between 2005 and 2006 The National Association Of Realtors placed the median sales price for existing homes at around $220,000, this group of Americans have amassed collective unencumbered wealth of 2.64 trillion dollars.
For most, their home is the single largest plank in their investment platform. They have worked hard, saved, paid off their debt and now sit (literally and figuratively) on an unquestionably secure and valuable asset. The trouble with it is it is not liquid. You can’t chip out a few bricks or take part of the porch to buy a new car, take a vacation, or make a gift to the grand kids.
But what if you could take that otherwise illiquid asset, convert it to cash, and still live in it? Too good to be true, you think. Not so. A reverse mortgage allows these frugal seniors to do just that. It allows them to enjoy the fruits of their hard work and judicious saving without having to deal with selling the property and uprooting themselves from their home of so many years.
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