Wife's age hurts reverse mortgage

Q. I am 78. My wife is 64. We own our home with a value of $550,000. No mortgage and no debts. We recently inquired about a senior citizen reverse mortgage and were told the best we can do is receive just $680 per month. The up-front fees would be about $13,000. The mortgage manager suggests we obtain a home equity loan instead. We have income of only about $60,000 per year. But we are cash poor and want to do some traveling. I know you recommend reverse mortgages. This doesn't seem like a good deal. Are we missing something?

A. The problem is you married a much younger lady. You could qualify for a very generous reverse mortgage based on your age alone and the home's market value.

But your young wife has a far longer life expectancy. Reverse mortgage lenders base eligibility on the age of the younger spouse who holds title. That's why the offered monthly lifetime $680 payment seems so low.

The simple solution is for your wife to quit claim her interest in the house to you. Then the reverse mortgage eligibility will be much higher, based on your age rather than hers.

Source: Bob Bruss