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Alberto Said:

So many reverse mortgage questions!?

We Answered:

The reverse mortgage program was set up by the Federal government to let elderly people with lots of home equity access that equity to have more money to live on. It was a way of counteracting the effects of inflation on pensions for really old people who didn't have many assets other than a home.

The programs are not for everyone. They do have large fees. But if you are 75-80-85, on a fixed income, do not care if your children get the money from your house (or don't have children), and need more money to live on, a reverse mortage may provide you with more monthly income. For example, a single woman, 70, with no income but SS but $80,000 equity in her house, could draw a lumpsum or monthly income for the rest of her life. It may not be a large amount, but it might make ththe difference between skimping and living a normal life.

When you move permanently or die, the house will be sold and the loan repaid, then anything left will be distributed to your heirs.

This is NOT a bad program. It just isn't for everyone. My husband and I have no children, we own our house outright, our siblings are all college-educated and don't need money, and we are planning to use a reverse mortgage in our 70's or 80's if, say, we have large medical bills that would otherwise bankrupt us. So there IS a place for reserve mortgages, just not for everyone.