Late-stage mortgages resulting in major financial challenges
In order to understand the nature and full implications of the financial challenges faced by millions of Americans throughout the state of Florida and beyond, it’s important to look at the economic trends and factors of the past and present. For older Americans currently facing foreclosure and/or personal bankruptcy, the findings of several recent studies point to reasons why so many are now having such a hard time staying afloat after retirement.
According to recent information provided by the Census, fewer and fewer young people are choosing to buy homes, while the recession failed to deter the majority of older Americans. That is not to say, however, that senior citizens across the country are not accumulating substantial amounts of personal debt as a result of homeownership. According to the Consumer Financial Protection Bureau, one of the reasons that retirement-age Americans continue to maintain mortgages is that it has become increasingly common in recent years to borrow against home equity in the face of financial difficulties. Beyond that, a significant number of home loans were refinanced in the past decade.
Another major hurdle for older Americans is the fact that their net worth has decreased significantly since the housing crisis struck some eight years ago. One study suggests that only around 50 percent of Americans without mortgage payments continue to work to the age of 64, while more than 60 percent of individuals still paying on a mortgage work up to that age. The research conducted by the Bureau also suggests that approximately 30 percent of older Americans owed around $80,000 on home mortgage loans in 2011.
Such findings are especially troubling since there is also evidence that housing costs alone account for more than one-third of the expenses of more than 50 percent of retired homeowners across the country.
Source: Yahoo! Finance, “The biggest threat to seniors’ retirement might be the roof over their heads,” Mandi Woodruff, May 8, 2014