Basic rules for reverse mortgages

59-year-old homeowner advised to wait

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DEAR BOB: I am 59, looking forward to retirement in a few years. My home has a mortgage of about $180,000. The house is worth around $500,000. Will I be able to get one of those reverse mortgages you often discuss? Will my outstanding mortgage balance prevent me from getting a reverse mortgage? – James T. DEAR JAMES: When you become 62, you can obtain a reverse mortgage, which pays you money (instead of you paying the lender money each month). At that time, if you have sufficient home equity, you can use your reverse mortgage to pay off your existing mortgage in a lump sum. Then you won't have any more monthly payments. Purchase Bob Bruss reports online. The old mortgage must be paid off when you get a reverse mortgage because the reverse mortgage must be recorded as a first mortgage. The reason is its balance will slowly grow as you use the funds and interest accrues. When you sell your home, move out for more than 12 months or die, then the reverse mortgage "matures" and mu...