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aarp reverse mortgages

AARP sues HUD over Reverse Mortgages: What is a reverse mortgage

netitle.net ttp hughfitzpatrick.com In this video, real estate attorney hugh Fitzpatrick from Tewksbury Massachusetts discusses the lawsuit ...

I'm an unemployed widow with $600000 saved — how should I spend and invest it?

Dear Moneyist,

I am a widow who is 63 years old. I receive $2,115 per month in Social Security and $533 per month for a pension. I have $600,000 saved. I have not been able to find work in the past five years so I am looking at the money I have as the best case scenario. I rent, but it is getting quite expensive.

Where I live it will cost $240,000 to get a modest town home. I am thinking of buying the house in cash so I will only have property taxes and homeowner association fees, and home insurance to pay monthly which will be $1,150 less a month then what I pay now. I will have $320,000 left to invest.

Don’t miss: My sister took care of our mother for 10 years — shouldn’t she be entitled to her house?

What do you think would be the best course of action to invest the money left over? I will need it to throw off $12,000 a year to supplement my Social Security and pension and, if possible, grow the principle investment. I am hoping to take the money in such a way as not to pay much in taxes.

AARP Weighs in on the 'New' Reverse Mortgage Math

Lori Trawinski, director of banking and finance at AARP’s Public Policy Institute, declines to call the changes positive or negative, but does admit that higher costs might make the loan less attractive — and new principal limits might mean fewer seniors will qualify.

“If you have an existing forward mortgage, that mortgage needs to be paid off before you can get a reverse,” she says. “So if someone is counting on a certain amount of reverse mortgage proceeds to be able to pay off a forward loan, it could be that with the new principal limit factors, they may not get enough proceeds out of the loan to do that.”

Higher upfront costs might also be a disincentive to consumers, Trawinski says.

“For about three quarters of borrowers, the upfront premium went from 0.5% to 2%, so that’s a significant increase. It may dissuade some borrowers from going forward with the loan,” she says.

Amy Ford, NCOA’s senior director of home equity initiatives and social accountability, agrees that these factors might influence consumer decisions and says the changes highlight the need for effective counseling.

Is Filing For Bankruptcy In Retirement A Good Thing?

The number of people filing for bankruptcy protection in retirement has soared in recent years — even before the recession.


Filing for bankruptcy would not include long term care since you have to pay monthly for assisted living or nursing care. You are correct that those are out of pocket costs unless you are on Medicaid.

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