Maximizing Home Equity or Preventing Home Loss: Reverse Mortgage Decision Making and Racial Inequality

Abstract Background and Objectives Reverse mortgages are loans that allow older homeowners to borrow from their home equity with no repayment due until the borrower dies or moves out of the home. We currently know very little about how homeowners evaluate and experience reverse mortgages as solution...

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Bibliographic Details
Published in:The Gerontologist 2019-03, Vol.59 (2), p.242-250
Main Authors: Keene, Danya E, Sarnak, Ann, Coyle, Caitlin
Format: Article
Language:English
Subjects:
African Americans
Aged
Clinical decision making
Decision Making
Ethnic Groups
European Continental Ancestry Group
Female
Financial Statements
Home equity loans
Home ownership
Housing
Housing needs
Humans
Inequality
Loans
Male
Middle Aged
Ownership
Prevention
Qualitative Research
Racial inequality
Research design
Reverse mortgages
Social inequality
Social research
Socioeconomic Factors
United States
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Summary:Abstract Background and Objectives Reverse mortgages are loans that allow older homeowners to borrow from their home equity with no repayment due until the borrower dies or moves out of the home. We currently know very little about how homeowners evaluate and experience reverse mortgages as solutions to their financial and housing needs in later life. Furthermore, despite an increasingly diverse population of reverse mortgage borrowers, we know little about how social inequalities may contribute to reverse mortgage decisions and their outcomes. In this paper, we examine reverse mortgage decision-making and experiences in a racially and economically diverse sample of older US homeowners. Research Design and Methods We conducted 44 in-depth interviews with older homeowners who were considering or who had obtained a reverse mortgage loan. We inductively and iteratively developed a thematic coding scheme that was applied to all interview transcripts. Results Our analysis produced a dichotomous schema of reverse mortgage decision making that was shaped by social and economic opportunities and constraints. For some participants, reverse mortgages represented strategic tools used to maximize home equity and its benefits. For others, it was an option of last resort to which participants turned when faced with the imminent loss of their home. Discussion and Implications Focusing on reverse mortgages, our analysis suggests way that social inequalities may be reproduced through financial decisions and the unequal landscapes of opportunity in which they are made.
ISSN:0016-9013
1758-5341
DOI:10.1093/geront/gnx209