Approaching the age of 62 in May, and may be interested in applying for a reverse mortgage.I sent for information from varies sources and receive impressive brochures, with a slanted viewpoint, with no particulars . What information is required for the lenders to provide, interest rate, closing costs? etc. What should I watch out for. Is there a list of things I should be looking for to compare.
Terry Says: Here’s a link to a column I wrote recently about Reverse Mortgages. The amount you can get — either in a lump sum or in a monthly withdrawal for as long as you live in the house — depends on interest rates and your age. If you start a reverse mortgage at age 62, you will get a much smaller amount than if you wait until you are at least 70, which is what I advise, (I had my own father do a RM at age 80 — and he’s still happily living in his condo as he nears his 95th birthday!)
But there are fees and interest involved. So you should only do a RM if you are planning to stay in the home for a long while. Otherwise you would be better off selling now, and downsizing, and then investing or saving the remaining money.