Ask Terry Questions Reverse mortgage to deal with student loans?

Reverse mortgage to deal with student loans?

By Terry Savage on October 14, 2019 | Housing / Real Estate

Is a reverse mortgage right for me?
My husband and I are 66/65 respectively.. we owe $280k on our mortgage in a house thats worth $600/650k! We are paying student loans and have huge credit card debt! My husband is a retired federal employee
with a $5k a month retirement. I would like to pay off the credit cards and some of the student loans. (Once the kids get jobs they will take over )

Terry Says

No.  You can’t do a reverse mortgage with that big balance on your loan. Even more importantly, you need some real help dealing with your debt.  I suggest and immediate call to the National Foundation for Credit counseling at 800-388-2227.  That will connect you to the nearest local office.  They can advise specifically — and you can trust them!

But here’s my take on your situation.  Now, before the next recession (which may come soon) is the time to sell your house, and move into something smaller –perhaps even renting.  Put the balance of the money in the bank (yes, earning next to nothing!) and guard it carefully.  Pay down any other debt, and keep up with the required payments on the student loans.  I hope your children will be able to “take over” in the future. Resist the temptation to help them out by using your cash to pay off  their loans!   But do pay down any parental PLUS loans, as those carry a very high rate of interest.

This will lift a huge burden from your shoulders –and you can enjoy life.  (Maybe in a warmer climate that has a lower cost of living!)  It’s time!!



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