HECM Mortgage Payoff Types by Borrower Age

HECM Mortgage Payoff Types by Borrower Age,

We came across this table that was part of a presentation at the Mortgage Banker’s Association 94th Annual Convention. The table shows, by borrower age, the cause for HECM reverse mortgage loan payoffs.

We’ve previously written about the surprising fact that the majority of HECM loans are paid off within seven years. This chart expands on this showing the general reasons why HECM loans are paid off.

Most notable is the fact that less than 1/3 of HECMs terminate due to death. Overall, the vast majority of HECMs terminate because the borrower sells and/or moves out - not because the borrower dies while living in their home.

Age, of course, is a major factor with loan terminations among older borrowers more likely to be due to death. But even up to age 90, “mobility” surpasses “mortality” as a cause for HECM loan termination.

This is useful information that potential reverse mortgage borrowers should understand before making a decision. Someone considering a reverse mortgage would do well to mull over these statistics and weigh their expectations against the reality of borrowers who have gone before them.

Distribution of Mortgage Payoff Types by Borrower Age