Still too young for reverse mortgage

DEAR BRUCE: I am a 72-year-old widow. My home is paid for. It appraises at $228,000. My income is very limited. I have a hard time each year paying the taxes and insurance. Would it be wise to take out a reverse mortgage on the home? I would either live in the house until my death or sell the house later on and pay off the reverse mortgage. Would this be a practical move for me? I don’t know much about reverse mortgages, the interest they charge or how much of the loan you could get on $228,000. My bank offers these types of mortgages, but I don’t know of anyone else that does. — M.W., Las Vegas, Nev.

DEAR M.W.: Reverse mortgages certainly serve a useful purpose. You should be able to borrow over a period of time, something on the order of 60 percent or approximately $125,000 on your home. Even if you exhaust the withdrawal, which is paid to you on a monthly basis, as long as the taxes and insurance are paid, you can stay there for the remainder of your life and cannot be evicted. You might wish to consider selling the house and moving into less-expensive quarters. Perhaps there are senior-citizens complexes available to you. You could apply now. It might take a few months to be admitted. No matter how it’s sliced, it seems to me that your living in your home for an extended period of time is not in your future. I understand that you would like to, but your finances just don’t permit it. Your bank and many others do offer reverse mortgages. The older one is, the higher the payout. A woman of your age still has a relatively long life expectancy ahead of her. Therefore, the payments will be more modest. I know this can be a hard pill to swallow but at least it’s a course of action that you should give serious consideration to.

Source: Bob Bruss