Social Security Changes Not Expected To Greatly Impact Reverse Mortgage Borrowers
New Social Security changes are being welcomed as the cost of living adjustment increases to its highest in seven years, according to a new report from Reverse Mortgage Daily. While this could have some small effects on reverse mortgage borrowers, experts don't believe it should be enough to change the way borrowers feel about reverse mortgages as a whole.
"The result of the COLA for the average individual retired Social Security beneficiary is expected to be a monthly benefit jump from $1,422 to $1,461, and the estimated monthly increase will be $39, or $468 a year according to AARP," reported RMD.
"Additional program changes include an increase in the earning limits for seniors between the ages of 62 and 67, an increase to the maximum amount of earnings subject to the Social Security tax, and a rise in both work credit earnings and supplemental security income for the disabled."
This puts a little more money in the hands of potential reverse mortgage borrowers, though, not nearly enough to reconsider using the product. To some experts the increase is small when compared to everyday needs of their clients who still have large financial obligations to stay on top of.
"The reverse mortgage is a great need in itself, and this small cost of living adjustment is definitely not going to save someone from losing a home or paying their mandatory obligations like insurance and taxes," said Sue Milligan, Certified Reverse Mortgage Professional (CRMP) with Bank of England in Metairie, La., according to RMD.
"It won’t be enough money to pay off an existing mortgage. Those are still needs that people have every single day, like through a medical expense."
Social Security changes are a relief for beneficiaries but not enough to turn them away from reverse mortgage products. To learn more about these changes and how they will effect reverse mortgage borrowers, click on the image above.