| Pub. Date | : Jul, 2019 |
|---|---|
| Product Name | : The IUP Journal of Management Research |
| Product Type | : Article |
| Product Code | : IJMR21907 |
| Author Name | : Sarita Gupta and Sanjay Kumar |
| Availability | : YES |
| Subject/Domain | : Management |
| Download Format | : PDF Format |
| No. of Pages | : 14 |
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.
The UN (2016) reports that advancement in medical science has led to low fertility, mortality, better healthcare and consequently population ageing. In 2015, globally, the number of older people aged 65 and above stood at 617 million (8.5%), and it was projected to touch 1.6 billion between 2025 and 2050. In India too, striking facts reveal that the share of aged population rose from 7.5% in 2001 to 8.6% in 2011 and projected to be 19% by 2050 (UNFPA, 2017). Thus the opportunity of demographic dividend is transforming itself into demographic challenge.