Harry Gross: On reverse mortgages
Dear Harry: I'm in a quandary. A little while ago, I read a piece in Parade magazine titled "Beware of Reverse Mortgages." There was another article I read saying that they were "very risky." Then I saw an AARP statement that 93 percent of the people who had them were pleased. I also saw an accounting group's article that says that they're the best thing since sliced bread. I never heard anyone who had a reverse mortgage say they were unhappy. I intended to go for one when my wife turns 62, but now I'm not sure. I've been told that the only real negative is that you will leave less to your children. They are better off financially than we are by a large margin, so they don't need our money. We want to do this in order to enjoy life a little more as we grow older. What's your take on reverse mortgages?
What Harry says: There are a number of things to consider before you go that route. The initial costs can be very high, so be sure to make a couple of comparisons. Make sure you will not take so large a payment that you run out of equity because you lived too long. Finally, what will you do if you need a substantial piece of that equity (for one of many possible reasons) at some later time? Once these issues are resolved, I see nothing wrong with reverse mortgages. As you probably know, they are most useful when there is a real need for the additional money.
Write Harry Gross c/o the Daily News, 400 N. Broad St., Philadelphia, PA 19130. Harry urges all his readers to give blood - contact the American Red Cross at 800-GIVE LIFE.