On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain

Reverse mortgage is one of the products (perhaps the main one) that is good to obtain additional income by using the habitual residence as collateral. The main objective of this paper is to analyse the effects that reverse mortgage contracting has on household finances over the lifetime of a family...

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Autores: Claramunt Bielsa, M. Mercè, Boj del Val, Eva, Varea, Javier
Tipo de recurso: artículo
Estado:Versión publicada
Fecha de publicación:2024
País:España
Institución:Universidad de Barcelona
Repositorio:Dipòsit Digital de la UB
OAI Identifier:oai:diposit.ub.edu:2445/214272
Acceso en línea:https://hdl.handle.net/2445/214272
Access Level:acceso abierto
Palabra clave:Hipoteques inverses
Sociologia de l'economia
Espanya
Reverse mortgage loans
Sociology of economics
Spain
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spelling On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from SpainClaramunt Bielsa, M. MercèBoj del Val, EvaVarea, JavierHipoteques inversesSociologia de l'economiaEspanyaReverse mortgage loansSociology of economicsSpainReverse mortgage is one of the products (perhaps the main one) that is good to obtain additional income by using the habitual residence as collateral. The main objective of this paper is to analyse the effects that reverse mortgage contracting has on household finances over the lifetime of a family according to the socioeconomic group to which it belongs in Spain. Four indicators are employed to measure the immediate and long-term effects. We use a stochastic model with a double source of randomness, survival and entry into dependency, and apply it to the three socioeconomic groups obtained with cluster methodology from the 2017 Spanish Household Financial Survey data. We conclude that the effects are very different dependingon the group: regarding only the effects of hiring a reverse mortgage on the income of the family, widowed women aged between 81 and 85 years, with low income and expenses as well as little net wealth, and a habitual residence that represents half of her net wealth (Cluster 1) are the most benefited; considering that the highest impact indicators are on the probability of illiquidity and on the value of lack of liquidity, the use of reverse mortgages benefits more the families in Cluster 3 (high income and expenses and really high net wealth, head of household aged between 76 and 80 years) and less the families in Cluster 2 (medium income, net wealth and expenses, head of household aged between 65 and 75 years).Vilnius Gediminas Technical University2024info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdfhttps://hdl.handle.net/2445/214272Articles publicats en revistes (Matemàtica Econòmica, Financera i Actuarial)reponame:Dipòsit Digital de la UBinstname:Universidad de BarcelonaInglésReproducció del document publicat a: https://doi.org/10.3846/tede.2024.21138Technological and Economic Development of Economy, 2024, vol. 30, num.4https://doi.org/10.3846/tede.2024.21138cc-by (c) Boj, E et al., 2024http://creativecommons.org/licenses/by/4.0/info:eu-repo/semantics/openAccessoai:diposit.ub.edu:2445/2142722026-05-27T06:46:51Z
dc.title.none.fl_str_mv On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain
title On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain
spellingShingle On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain
Claramunt Bielsa, M. Mercè
Hipoteques inverses
Sociologia de l'economia
Espanya
Reverse mortgage loans
Sociology of economics
Spain
title_short On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain
title_full On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain
title_fullStr On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain
title_full_unstemmed On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain
title_sort On which socioeconomic groups do reverse mortgages have the greatest impact? Evidence from Spain
dc.creator.none.fl_str_mv Claramunt Bielsa, M. Mercè
Boj del Val, Eva
Varea, Javier
author Claramunt Bielsa, M. Mercè
author_facet Claramunt Bielsa, M. Mercè
Boj del Val, Eva
Varea, Javier
author_role author
author2 Boj del Val, Eva
Varea, Javier
author2_role author
author
dc.subject.none.fl_str_mv Hipoteques inverses
Sociologia de l'economia
Espanya
Reverse mortgage loans
Sociology of economics
Spain
topic Hipoteques inverses
Sociologia de l'economia
Espanya
Reverse mortgage loans
Sociology of economics
Spain
description Reverse mortgage is one of the products (perhaps the main one) that is good to obtain additional income by using the habitual residence as collateral. The main objective of this paper is to analyse the effects that reverse mortgage contracting has on household finances over the lifetime of a family according to the socioeconomic group to which it belongs in Spain. Four indicators are employed to measure the immediate and long-term effects. We use a stochastic model with a double source of randomness, survival and entry into dependency, and apply it to the three socioeconomic groups obtained with cluster methodology from the 2017 Spanish Household Financial Survey data. We conclude that the effects are very different dependingon the group: regarding only the effects of hiring a reverse mortgage on the income of the family, widowed women aged between 81 and 85 years, with low income and expenses as well as little net wealth, and a habitual residence that represents half of her net wealth (Cluster 1) are the most benefited; considering that the highest impact indicators are on the probability of illiquidity and on the value of lack of liquidity, the use of reverse mortgages benefits more the families in Cluster 3 (high income and expenses and really high net wealth, head of household aged between 76 and 80 years) and less the families in Cluster 2 (medium income, net wealth and expenses, head of household aged between 65 and 75 years).
publishDate 2024
dc.date.none.fl_str_mv 2024
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/2445/214272
url https://hdl.handle.net/2445/214272
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Reproducció del document publicat a: https://doi.org/10.3846/tede.2024.21138
Technological and Economic Development of Economy, 2024, vol. 30, num.4
https://doi.org/10.3846/tede.2024.21138
dc.rights.none.fl_str_mv cc-by (c) Boj, E et al., 2024
http://creativecommons.org/licenses/by/4.0/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv cc-by (c) Boj, E et al., 2024
http://creativecommons.org/licenses/by/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Vilnius Gediminas Technical University
publisher.none.fl_str_mv Vilnius Gediminas Technical University
dc.source.none.fl_str_mv Articles publicats en revistes (Matemàtica Econòmica, Financera i Actuarial)
reponame:Dipòsit Digital de la UB
instname:Universidad de Barcelona
instname_str Universidad de Barcelona
reponame_str Dipòsit Digital de la UB
collection Dipòsit Digital de la UB
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,81155

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