How People View Reverse Mortgages
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Reverse Mortgage Daily recently commented on a Harris Poll describing consumer attitudes towards mortgage products and mortgage advertising - including reverse mortgages. We took a close look at this poll and found some really interesting results showing consumer views on reverse mortgages that we thought deserved further comment here:
1. Awareness of reverse mortgages is remarkably high among the mature (62+) market.
Apparently, the James Garner and Robert Wagner adds are hitting their mark with seniors. We thought it was remarkable that a higher percentage of seniors (86%) are aware of reverse mortgages than are aware of fixed rate mortgages (84%) or home equity loans (83%).
As would be expected, awareness of reverse mortgages trends upward with age. Seventy-two percent of baby boomers indicate they are aware of reverse mortgages - which seems like a healthy score - but is lower than baby boomer awareness of all other mortgage products except “interest only” mortgages..
2. Understanding of reverse mortgages isn’t nearly as high.
But while seniors indicate they are highly aware of reverse mortgages their understanding of reverse mortgages lags somewhat:
Sixty-four percent of seniors indicate they understand reverse mortgages - a higher level than those understanding exotic products like “interest-only” mortgages - but well under the understanding levels of traditional fixed-rate and home equity mortgages.
Understanding of reverse mortgages across all age groups was the lowest of any mortgage product (49%) Again, it is worth noting how understanding of reverse mortgages grows with age.
3. Reverse mortgages continue to have a bit of an image problem.
We’ve commented before about the negative connotation that the phrase “reverse mortgage” has for many people. Overall, 36% of respondents had unfavorable impressions of reverse mortgages and 25% had favorable impressions.
More interesting to us was the finding that only 5% of respondents have “very favorable” impressions of reverse mortgages. (Balloon, interest-only and adjustable-rate mortgages had lower ratings, while fixed rate mortgages and home equity loans fared much better.) It seems that reverse mortgages, more than other mortgage products, strive to be perceived as doing “social good” - i.e. helping seniors improve their living standards and age with dignity. The fact that more people aren’t viewing them this way should be cause for concern.
“Based on everything you may have seen, heard or read, and/or your own experience, what are your impressions of each product below?”
Interestingly, 39% of respondents don’t care one way or the other about reverse mortgages.
The Harris Survey is quite interesting and worthwhile to read - and we recommend taking the time to do so. If you’re a borrower or potential borrower it is interesting to see how your answers correspond to survey results. If you’re a lender or other reverse mortgage professional, you may gain some valuable marketing insights.
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