Economic Factors Influencing Indian Older Homeowners' Decision to Opt for Reverse Mortgage: An Empirical Investigation.
Gupta, Sarita
Economic Factors Influencing Indian Older Homeowners' Decision to Opt for Reverse Mortgage: An Empirical Investigation. - 25-38 p.
The paper investigates what economic factors contribute most to the uptake of reverse mortgage by the Indian elderly homeowners. Binary logistic regression is used on a cross-sectional primary dataset of 410 elderly homeowners residing in different metro and non-metro cities of India. The result reveals that economic factors play an important role in reverse mortgage decision making. Coefficients related to employment status, income, cash sufficiency, insurance and financial wellbeing of the children are found to be significant factors that influence the elderly homeowners in opting for reverse mortgage. Being employed, cashconstrained and absence of insurance are significant and positive determinants of reverse mortgage uptake, while higher family income of elderly homeowners significantly reduces the probability in reverse mortgage participation. Further, the results indicate that financial wellbeing of children plays a significant and positive role in uptake of reverse mortgage by parents. Possession of high home equity and financial assets does not contribute significantly to reverse mortgage uptake. Overall results suggest that more liberal provisions like enhancing the cap of loan limit and higher Loan to Value (LTV) ratio should be introduced so that it can work like a cushion for elderly homeowners in their later life. [ABSTRACT FROM AUTHOR]
Reverse mortgage loans Personal finance Equity (Real property)
Economic Factors Influencing Indian Older Homeowners' Decision to Opt for Reverse Mortgage: An Empirical Investigation. - 25-38 p.
The paper investigates what economic factors contribute most to the uptake of reverse mortgage by the Indian elderly homeowners. Binary logistic regression is used on a cross-sectional primary dataset of 410 elderly homeowners residing in different metro and non-metro cities of India. The result reveals that economic factors play an important role in reverse mortgage decision making. Coefficients related to employment status, income, cash sufficiency, insurance and financial wellbeing of the children are found to be significant factors that influence the elderly homeowners in opting for reverse mortgage. Being employed, cashconstrained and absence of insurance are significant and positive determinants of reverse mortgage uptake, while higher family income of elderly homeowners significantly reduces the probability in reverse mortgage participation. Further, the results indicate that financial wellbeing of children plays a significant and positive role in uptake of reverse mortgage by parents. Possession of high home equity and financial assets does not contribute significantly to reverse mortgage uptake. Overall results suggest that more liberal provisions like enhancing the cap of loan limit and higher Loan to Value (LTV) ratio should be introduced so that it can work like a cushion for elderly homeowners in their later life. [ABSTRACT FROM AUTHOR]
Reverse mortgage loans Personal finance Equity (Real property)