QUESTION: My wife and I are considering a reverse mortgage to pay off our existing conventional loan and receive a few dollars to make repairs. We have a fixed income and are looking forward to living in the house for the rest of our lives without having to make payments. Because I am several years older than my wife, the lender is telling us that we can take out more money if we leave her name off the mortgage. Is it a good idea?

— Mark

ANSWER: No. You can get a reverse mortgage starting at age 62. The older you are, the higher the percentage of the home value you can borrow against. For this reason, some people fall into the trap of not including their spouses on the reverse mortgage.

Because these mortgages must be paid off shortly after the borrower dies, if only one spouse is on the note, the surviving spouse may lose the home to the bank.

This can’t happen if both spouses are listed because a reverse mortgage doesn’t need to be paid back until the last borrower dies or moves out of the property. I recommend reverse mortgages only if both spouses are listed as borrowers, even if it means that you can take out less money.

A reverse mortgage will pay off your existing loan, and you will not have to make payments for the rest of your life. It makes sense for a lot of seniors, but make sure you clearly understand what you’re getting before signing on the dotted line.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.

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