Q: My husband is 69 and I am 64 and he would like us to do a reverse mortgage. The mortgage balance is $215,000 and the house is valued at approximately $300,000. We have a special needs son (he has Asperger’s syndrome) living with us and three other independent children.
My husband is anxious to do a reverse mortgage and I am reluctant. What factors should we consider before doing a reverse mortgage to decide whether this is right for us? Thank you for your help.
A: Here’s what I’m thinking: You won’t qualify for a reverse mortgage. To do a reverse mortgage, you need to have virtually no mortgage balance. If your house is mortgage free, you’d only be able to borrow up to about 60 percent of the value, which is less than what you owe on the property.
For those individuals who have a home that has no mortgage or almost no mortgage on it, a reverse mortgage allows a new mortgage to be placed on the property. The homeowner could then receive a lump sum or monthly payment from the lender and use that money for living expenses. The reverse mortgage is paid back when the home is sold.
Finally, you have to be at least 62 years old to qualify for a reverse mortgage.
I have written extensively about reverse mortgages on my website. Please search there for additional information, and then if you’re still interested and want to check it out, please find a qualified reverse mortgage lender. You can go onto the HUD.gov website, and find the link to a housing counselor. They will guide you from there.
Feb. 26, 2009.
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