Housing Reverse Mortgage Pricing Model And Its Application Research

The accelerated arrival of an aging population society is making China face an unprecedented grim old-age security issues. Seriously lagged social security system is facing increasing challenge. The construction of the social pension system will gradually transform into the new pension system. Responding to this crisis of aging,"House-For-Pension" pattern is one of pioneering pension ideas and a good way to expand the endowment resources. Housing reverse mortgage is already a prevalently new financial instrument in western countries for the purpose of "House-For-Pension". Both in the western countries where the financial market is relative mature and in our country that is at the early stage of exploration, one of the core content about housing reverse mortgage is the proper risk pricing for its products, so that the business can be based on scientific and rational basis.The first section of this article, firstly we lead the research problems and significance from the serious situation of population aging in our country at present. Then introducing the relevant domestic and international literature review about the product pricing of housing reverse mortgage; Building the studies framework of the full text through overall framework research, methods research and chapters arrangements.Finally, the innovation of this paper was itemized.The second section of this article, we define and analyze comparatively the development, concept and characteristics of the housing reverse mortgage that is one of new financial products. Then we introduce the theoretical basis for the pricing of this product mainly from the asset pricing theory, option pricing theory, actuarial theory and martingale pricing theory.Pricing is the key to successful implementation of the housing reverse mortgage. This article puts the product pricing as a key about the study and discussion of the housing reverse mortgage in the third and fourth sections. Firstly we state that product pricing of the housing reverse mortgage involves a lot of risk factors. The interest rate, fluctuation of housing price and expectation of life are the most three main factors. And we draw the graphics to present the risk factor identification framework of the housing reverse mortgage. Then we analyze the mature models of the three main factors at home and abroad and define the relevant pricing parameters.We also establish the benchmark pricing model system of the single life and the double life according to the way of lump-sum, annuity and per month. Finally, introducing the idea of "bonus" for our loan interest rate and housing price using conservative values, expecting reasonably the old man’s life in the future through the insurance actuarial theory and valuing the housing reverse mortgage products using the Matlab software,In the final chapter of this paper, we analyze and study the implementation and product pricing combining the characteristics of the housing reverse mortgage at the present stage. The feasibility of application of the housing reverse mortgage is analyzed from the pension form, operating mechanism, pension funds sources, concept transformation and theory research. Then the constraints of this business were described item by item. Finally, this paper gives the suggestions of this business combining with the results of this paper.Overall, the paper constructs a more comprehensive pricing system, and the numerical simulation for the money received is calculated in different ways selecting the appropriate pricing model and parameters to provide a reasonable pricing method and results for the housing reverse mortgage products. Providing effective pricing theory basis and practical significance for our upcoming housing reverse mortgage and alleviating the problem of aging society which is becoming more and more serious are the main purpose of the paper.