Reverse Mortgage Loan Blog

Q: My second marriage is to a man who hasn’t prepared himself for retirement. We married at 57, 15 years ago. He is an insurance salesperson who took his Social Security at 62 and has been working part-time ever since. I am a teacher who intends to continue working until 75. Our finances are limited. To overcome this, he wants to take out a reverse mortgage of $1,200 per month on our house now worth $60,000.

I am very conservative (he’s a risk taker) and I don’t know if this is a good or bad idea. Naturally, he carries minimum life insurance. Please advise this confused lady.

Confused, Miami

A: A reverse mortgage of that size would eat up your home equity in no time. What an awful idea.

Reverse mortgages can be good ideas when you’re older, or if you’re really in a pinch. They can be for a certain period of time or can be for the person’s lifetime, even if you live so long that all the available equity in your home is used up.

It’s imperative that any reverse mortgage, as good as the cash flow might feel, be able to keep you in your home for as long as you wish to live there.

You’re right to be conservative, especially now. Have a talk with your husband and do a budget. Pull in your belts if necessary. Ask him to increase his workload and contribute more to the household, not take from it. A roof over your head is the most important security you can have with this man. Keep it that way. While you’re still working, by the way, you might want to sock some money away in a separate account just in your name for a rainy day. (My Aunt Ruth called it a pishkie.)

Because your husband chooses to walk a tight rope without a net doesn’t mean you have to. Spend your home equity now? Nope.

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