Elderly woman seeks quick cash for home repairs

DEAR BOB: My stubborn mother, 78, owns her home free and clear, is alert and in quite good health. The house is worth about $450,000. When I recently visited her (I live about 1,500 miles away so don't get to see her often), I was shocked at how run down her house has become. The roof leaks. I could smell the mold. She finally admitted to me, after a glass or two of champagne at Sunday brunch, that she has outlived her assets, except for Social Security and a small pension. When I suggested a reverse mortgage, which you often recommend, she said her banker recommends a ###home equity loan### to pay for a new roof and other repairs. She wants to stay in her house "forever," especially because she loves her garden. What do you suggest? --Thomas R.

DEAR THOMAS: The big drawback of a home equity credit line is it requires monthly payments of at least interest only. If your mother is on limited income, how will she be able to afford the monthly interest payments?

Purchase Bob Bruss reports online.

As you know, I often suggest a senior citizen reverse mortgage should be obtained only if the homeowners expect to stay in their home at least five years. The key reason is the up-front reverse mortgage fees are quite expensive unless amortized over five years or longer.

A reverse mortgage could solve your mother's financial problems by providing a lump sum for a new roof and other repairs, and perhaps even for a frivolous expenditure such as a trip around the world or a new car. Then she can use the balance of her entitlement to provide a credit line or lifetime monthly income, as she chooses.

To locate reputable local reverse mortgage originators for your mother, I suggest you go on the Internet to www.reversemortgage.org and then click on her home state. She should compare the FHA, Fannie Mae, and Financial Freedom Plan reverse mortgages. More details are in my special report, "The Whole Truth About Reverse Mortgages for Senior Citizen Homeowners," available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com.

(For more information on Bob Bruss publications, visit his
Real Estate Center).

Copyright 2006 Inman News