Dear Bruce: I am 75, and my husband is 76. Like many, we are house-rich but cash-poor. We are in good health, and we have a lot of fun traveling. After moving to Florida, we had expenses we never expected. Is a reverse mortgage a good option for us? We have in excess of $250,000 in our home. — D.B., via e-mail
Dear D.B.: A reverse mortgage for many people is a viable way to extract cash from their home and still live in it. Simply put, the mortgage company will send you an agreed upon sum every month until yet another agreed upon number is reached. Once you have exhausted that number, you will no longer receive a check and you may live there for the balance of your life and your husband’s. At the time both of you have passed on, the home will be sold and the mortgage company will recover its advances, plus interest. The older you are, the more viable a reverse mortgage becomes. Often, I receive inquiries from people in their 50s. First of all, it’s unlikely a reverse mortgage would be issued to them, but, even if it were, it would be a very small number since that person’s life expectancy could be as much as 30 years. The older the applicant, the more favorable the terms.
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