More Americans are heading into their retirement years with outstanding mortgage payments – and the amounts of those payments are on the rise.
Christopher Mayer, a Columbia Business School professor of real estate, finance and economics, says that inflation-adjusted mortgage debt for homeowners ages 60 to 65 have more than tripled, from less than $30,000 to about $100,000, between 1992 and 2010.
“When we updated our data through 2013, the higher amounts remained steady,” Mayer told the San Antonio Express-News. “The share of homeowners in this age group who do not have a mortgage has fallen to about 45 percent. That compares to 55 percent a decade ago. These are tough numbers for retirees to overcome.”
Hit by unexpected expenses, layoffs, credit card bills or college loans, these baby boomers are being forced to work longer, downsize or rely on borrowing to meet their monthly payments.
According to the most recent data from the Consumer Financial Protection Bureau, three times as many older homeowners were leaving the workplace still owing a monthly mortgage in 2011 compared to 2001. And in 2011, 6.1 million homeowners 65 and older were paying monthly mortgages, up from 3.8 million in the same age group during the same period.
According to a survey conducted by Harris Poll on behalf of the Million Dollar Round Table, 66 per cent of Baby Boomers have financial concerns, which makes the financial advisor role of a mortgage expert all that more important, says James Pittman of the MDRT.
“It’s never too late to make resolutions and one area not to overlook is a person’s financial wellness,” Pittman told MPA. “The findings in this survey reinforce the need for people to speak to a financial advisor and develop a tailored plan to accomplish their short and long-term financial goals.”
An examination of nationwide loan data as of 2011 in the report, “Nightmare on Main Street: Older Americans and the Mortgage Market Crisis,” found that more than 3 million Americans were at risk of losing their homes, with delinquent payments and foreclosures increasingly common.
“People have 100 per cent of the ability to tackle their debt with the help of a financial advisor,” says MDRT’s Second Vice President, Mark Hanna. “Developing a budget and avoiding the use of consumer credit cards to pay for daily expenses will keep most people out of financial stress.”