Reverse Mortgage Loans: A Quantitative Analysis

Makoto Nakajima · Irina A. Telyukova

166 citations0/0 files storedThe Journal of Finance

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Financial Literacy, Pension, Retirement Analysis Housing Market and Economics Retirement, Disability, and Employment

Abstract

ABSTRACT Reverse mortgage loans (RMLs) allow older homeowners to borrow against housing wealth without moving. Despite rapid growth in this market, only 1.9% of eligible homeowners had RMLs in 2013. In this paper, we analyze reverse mortgages in a calibrated life‐cycle model of retirement. The average welfare gain from RMLs is $252 per homeowner, and $1,770 per RML borrower. Bequest motives, uncertainty about health and expenses, and loan costs account for low demand. According to the model, the Great Recession's impact differs across age, income, and wealth distributions, with a threefold increase in RML demand for lowest income and oldest households.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 166 citations exist upstream.

References

1965Uncertain Lifetime, Life Insurance, and the Theory of the Consumer 2002Consumption Over the Life Cycle 2010Why Do the Elderly Save? The Role of Medical Expenses 2002Owner-Occupied Housing and the Composition of the Household Portfolio 2004Wealth Inequality and Intergenerational Links 1999New Evidence on the Money's Worth of Individual Annuities 1989Mortality Risk and Bequests 2003Household Risk Management and Optimal Mortgage Choice

Cited by

2016Savings After Retirement: A Survey 2016Reverse mortgages: What homeowners (don’t) know and how it matters 2019Aging in Place, Housing Maintenance, and Reverse Mortgages 2018THE RETIREMENT‐SAVINGS PUZZLE REVIEWED: THE ROLE OF HOUSING AND BEQUESTS 2019Home Equity in Retirement 2019Is there a demand for reverse mortgages in China? Evidence from two online surveys

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.