MORTGAGES

As the cost of living increases many people are feeling the pinch. If you
are a homeowner experiencing a shortfall between income and
monthly expenses, you could consider a reverse mortgage.

Reverse Mortgage options have been available for at least 15 years, but are
only slowly growing in popularity. A mortgage is a loan available to
homeowners who have paid off all or most of their mortgage. The amount of
money available to you will depend on the value of your home. There are some
significant advantages as well as disadvantages related to obtaining a
reverse mortgage. If this is an option you are considering, talk with your
financial advisor or another knowledgeable person you trust to find the
terms and options that are right for you.

The most important advantage of a reverse Mortgage is that you will not be
required to repay the loan as long as you remain in your home. Provided that
you remain current with real estate taxes and fees, you are in no danger of
losing your home as a result of a reverse mortgage. The loan and all
associated costs will be repaid to the lender when you move, sell your home
or pass away. Proceeds remaining after the loan has been repaid, if any,
will be disbursed to your beneficiaries.

Loans are available from the public as well as the private sector. Each
carries different limits and benefits. For example, loans made available
from the public sector are usually not as costly as loans made by the
private sector but they are also less flexible. If you are hoping to use
loan funds for daily living expenses a public sector loan may not be for
you.

The most significant disadvantage of a reverse Mortgage is cost. Associated
fees coupled with the interest accrued over the life of the loan can swallow
a hefty portion of sale proceeds. If you are hoping to leave the bulk of
these funds to your children, rather than to a lender, consider carefully.
You must also be certain that you intend to remain in your home. If you
change your mind and decide to move into smaller living quarters or even an
assisted living program the funds you need may not be available as you will
have exhausted them with the loan.

Reverse Mortgages are available from a few different sources depending on
where you live. Some options include the Federal Insured Home Equity
Conversion Mortgage available through the U.S. Department of Housing and
Urban Development; Financial Freedom Funding Corporation; Fannie Mae, and
your local housing agency.

If you want to learn more about reverse mortgage options, AARP is good
source. The American Association of Retired Persons has a booklet with
helpful information available on its website. Another good information
source is the National Reverse Mortgage Lenders Association, which has a
free booklet available. Request it by calling toll-free, 1-866-264-4466. The
more you know the more likely you are to make a decision that is right for
you now and in the long term.