Reverse Mortgages: Challenging the Trade-off between Financial and Real Assets | Chapter 06 | Emerging Issues and Development in Economics and Trade Vol. 2
The aim of this paper is to question
whether it still makes sense to feel attracted by the trade-off between
financial and real assets, based upon the main features of reverse mortgages.
Towards this ambitious goal, useful insights can be gained by exploring Italy’s
recent legislation regarding these loans: on one hand, new opportunities to borrow
have been made available, that are secured by home equity and that represent
strategic options for financial management purposes, despite some criticism and
limited adoption so far; on the other hand, homeowners are encouraged to
reconsider their residential property as a way not only to satisfy their
housing needs but also to achieve higher standards of living, especially after
retirement. Within this framework, the trend towards increasing globalization
has made traditional keys of classification obsolete; therefore, total wealth
management should be focused on, rather than paying as much attention as in the
past to portfolios consisting of securities alone. Conclusions sound like an
invitation to devote unprecedented energies to financial counseling and
education, in order to increase individual investors’ awareness and help them
to make more informed decisions about their asset allocation, particularly in
the later stages of their life cycle.
Author(s) Details
Margherita Mori
Department of Industrial and
Information Engineering, and of Economics, University of L'Aquila, Via Giuseppe
Mezzanotte, 67100 L'Aquila, Italy.
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