Reverse Mortgage Loans : A Quantitative Analysis ∗

  title={Reverse Mortgage Loans : A Quantitative Analysis ∗},
  author={Makoto Nakajima and Irina A. Telyukova},
Reverse mortgage loans (RMLs) allow older homeowners to borrow against housing wealth without moving. Despite growth in this market, only 2.1% of eligible homeowners had RMLs in 2011. In this paper, we analyze reverse mortgages in a calibrated life-cycle model of retirement. The average welfare gain from RMLs is $885 per homeowner. Our model implies that low-income, low-wealth, and poor-health households benefit the most, consistent with empirical evidence. Bequest motives, nursing-home-move… CONTINUE READING


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