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Reverse mortgage as an income stabilizer for the elderly in Korea

  • Reverse mortgage as an income stabilizer for the elderly in Korea
  • Heo, Yong-Chang; An, Seungjae; Hong, Baeg Eui
  • [Brisbane, Australia] : John Wiley & Sons Australia, Ltd
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Title Reverse mortgage as an income stabilizer for the elderly in Korea
Author Heo, Yong-Chang; An, Seungjae; Hong, Baeg Eui
Publisher [Brisbane, Australia] : John Wiley & Sons Australia, Ltd
Publication Date 2016 - 02
Material Type Article
Country South Korea Holding John Wiley & Sons Australia, Ltd
Language English License
Pages 10

Abstract

This paper examines the features of reverse mortgages in Korea, comparing beneficiary and non-beneficiary groups in relation to income security for elderly homeowners without sufficient income. In addition, this study estimates how much poverty rates would decrease if all elderly single and couple households joined the program. A reverse mortgage was implemented in 2007 in Korea as a government guaranteed scheme for elderly homeowners. Notwithstanding the contribution of the reverse mortgage program, many elderly homeowners do not utilize the system as a useful means to earn additional income. Given the high elderly poverty rate and incomplete social safety net in Korea, the program should be extended to supplement the insufficient income of elderly “house-rich but cash-poor” households. The paper first reviews reverse mortgage policy details. We then investigate key characteristics of the beneficiaries and compare beneficiaries and non-beneficiaries based on nationwide survey data. (The rest omitted)

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