PHILADELPHIA (CBS) – For the past few years, the state of the nation’s real estate market has been well documented. One casualty of this shaky market has been seniors.
American Heritage Federal Credit Union Vice President of Mortgage Services Cos Manzo says seniors are in a tough spot today. Because their homes have devalued so much, they can’t consider a reverse mortgage which is a loan where seniors use a portion of their home as collateral to get a stipend to supplement their income while living in the family home.
“You are looking at 20 to 25 percent reduction in what they are able to get today as compared to three years ago. That’s huge!”
Manzo also says seniors who no longer want to stay in their homes can’t sell them without a considerable loss.
“The majority of most people’s retirement money is in the equity in their home. If they can’t get the money they need or what the house was worth three or four years ago, well now they are stuck.”
Manzo believes it will take up to five years for the real estate market to begin to rebound, and that can be a long wait for couples who want to start their retirement.
Reported by Michelle Durham, KYW Newsradio