I agree that the first and best thing you can do is talk to someone that deals in retirement investing. My parents did not do this and they are in a world of hurt because the didn't.

What you want to do is get a reverse Mortgage. You will pay off your existing note and you will make interest off your property putting money in your pocket every month. This type of program is not very widely known about and is only offered if you are over 62 but you are an excellent candidate, let your home pay you. Talk to a local lender or e-mail me if you like.

Tom,

Before anyone looks at a reverse mortgage, there has to be a determined need for such a product. So far, from the information the original poster provided, an income need is not apparent. Therefore, a reverse mortgage would be a costly product that only serves to increase debt.

A reverse mortgage is an excellent tool, if used correctly, and if applied to an appropriate situation.

There is much more that needs to be done from a planning perspective first, and know about the home/family. Do they want to pass on the home to the family? Are they caregivers to parents or disabled children? What about long-term care and what's their plan there?

While you are paying off the existing note, you are creating a new one, albeit at a different interest rate. If they plan on passing the home to the children, can the children afford to take over the home? Assume the debt?

With their asset base being low, would it make sense to just pay off the home, and gift it now to their children? I don't know... this is where personalized advice comes into play. They need to meet with someone to go over things, and look at all avenues.

Mynion,

Obviously there are circumstances and they need to meet with someone, however, this is a forum website and I was merely stating an option.

"A reverse mortgage is an excellent tool, if used correctly, and if applied to an appropriate situation."

Yeah no kidding and like you said we don't know the situation, if we aproach this site with that mentality no one would say anything. He was looking for opinions and suggestions and I was merely pointing out that a reverse loan is an option for them. Which I thought was what anyone posting an a forum site is looking for, options, but from now on we should all reply to every post by saying "this is where personalized advice comes into play. They need to meet with someone to go over things, and look at all avenues." No kidding pretty much every poster of every thread needs to meet with someone and look at all Avenues, I didn't say OH you GOTTA get a reverse Mortgage I said talk to someone its an option. OPTIONS are what people posting are looking for, correct me if I'm wrong.

Tom,

I was simply pointing out that a lot of questions have to be answered before a reverse mortgage would enter the conversation.

You state in your post, "you are an excellent candidate", but you do not know enough about their situation to make this statement. Just because they are over age 62 and have equity in their home, doesn't make them an "excellent candidate".

Bringing up the option is not the issue. I liked the fact you brought it up. Just provide all the facts as to WHY it would appropriate for this poster. If your note included more substance, I wouldn't've commented the way I did. In my view, you jumped to a conclusion that was not based on any information provided in the original post.

Although I made some obvious statements in my post, it was for the benefit of the original poster. Not everyone knows when they should get professional help or not. If they wish to learn more about reverse mortgages, they are free to do so.

Mynion,

I understand what your saying and as I am re-reading these posts I have a little more to say. "A reverse mortgage increases bebt" I know it does but to word it the way you did is misleading. He could get cash in a lump sum or on a monthly basis, which is what I would direct them to do, and they won't pay interest untill the house is sold. Obviously, I'm sure you know this as do I however, they probably do not. The value of the home will more than pay off the difference of the interest thus paying off the debt. It is a low risk move especially for a retiring couple, and yes if they have special needs or want to gift the house than they would want to go a different route but they are EXCELLENT CANDIDATES for a reverse mortgage.

But Tom, if they don't have a need for the additional income, or the lump sum of cash, wouldn't it make better sense to put a fixed home equity line of credit in place?

Their original question was whether to pay off the home mortgage or not. The easy answer is no, it is typically not better to do so. A reverse mortgage would provide them income to offset the mortgage cost, thereby paying off their mortgage, with possibly some cash in hand. So it is a viable solution to the question asked.

However, I'm simply pointing out, for reader's sake, that some other questions have to be asked before a reverse mortgage comes into play. Your post pointed out the benefit without any of the downsides. The downsides to reverse mortgages are:

• High cost, leading homeowners to often owe dramatically more than they borrowed
• Complex contract terms that are confusing, increase overall costs, and are often not fully disclosed
• Numerous fees that drive up the costs, including origination fees, points, mortgage insurance premiums, closing costs, servicing fees, shared equity or "maturity" fees, and shared appreciation fees
• Financial counseling that is often inconsistent and not independent of the lender
• Adverse impacts on government benefits
• "Estate planning" fee scams

All of which require a competent professional to fully explain.

As I stated before, I'm fine with this solution being brought up for discussion. But all too often people look at the benefits of a solution without the downsides/disadvantages.

Here is an interesting article I keep for reference when it comes to reverse mortgages...

The Real Deal - Ken Harney - The hidden dangers of reverse mortgages

Chris

While the danger in that particular story may not exist in most reverse mortgages issued today, we've seen other loopholes and fine print just as dangerous.

We use reverse mortgages in our practice when other strategies are no longer effective.

Here are the 3 questions you HAVE to ask when contemplating a reverse mortgage:

1. How much money would you get?
2. How much would it cost you?
3. How much equity would be left when you sell or die?

Hello Don...

I just read your question as well as the varying answers and I'd have to agree with the poster who said to find a good and trusted advisor on this. Only you and your wife can make these investment decisions because it's your future and everyone invests in different ways.

Personally I'm frantically trying to pay off our mortgage as soon as we can. We cut *many* years off the payments. The couple "little" reasons to keep it going are highly outweighed by the benefits of having the extra money each month to do with what we want.

I've made many mistakes... the biggest being selling a lot of gold at a very bad time, but the good part is that it wasn't on the advice of an advisor, I got freaked out after 9-11 and made a very expensive error. If someone else had advised that sale, I'd still be fuming.