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Mulling a mortgage to make house disabled-friendly

Another alternative is to use IRA rollover money to cover the cost.

DEAR HARRY: Way back in 1941, my parents bought this great twin home. When they died in the '70s, we moved into the house and had the title changed. We also borrowed on a mortgage that finally was paid off about 10 years ago. Now we are considering how to handle our retirement, and we hope to stay here. However, the house will need a lot of work to make it disabled-friendly. We'll need about $30,000. We have enough in our IRA rollovers to cover this and a good deal more. However, we are in our 50s, so there would be a penalty in addition to our income tax on any withdrawal. As an alternative, we can get a fixed-rate mortgage at 3.2 percent for 10 years with a guaranteed maximum $500 closing cost. That would take us both to our projected retirement dates. Which is the best way for us?

WHAT HARRY SAYS: The first thing to consider is the size of the house. It may be that a smaller unit (all on one floor) will serve your needs better. You may even get more for your present home than the cost of a newer one, which will help toward upgrading the new house. This will solve your problem, or at least cut it down. As to the original question: Borrow the money. Having a small mortgage at a good rate is better than paying the tax and getting hit with a penalty.