Page 22 Sa nir Sa a y Senior Seni by Jim Miller Is a Reverse Mortgage a Good Idea? Dear Savvy Senior, What can you tell me about reverse mortgages? When my husband passed away last year my income dropped almost in half, and I’ve been struggling to keep up with my monthly living expenses. Senior Homeowner Dear Senior, For retirees who own their home and want to stay living there, but could use some extra cash, a reverse mortgage is a viable fi nancial tool, but there’s a lot to know and consider to be sure it’s a good option for you. Let’s start with the basics. A reverse mortgage is a unique type of loan that allows older homeowners to borrow money against the equity in their house (or condo) that doesn’t have to be repaid until the homeowner dies, sells the house or moves out for at least 12 months. At that point, you or your heirs will have to pay back the loan plus accrued interest and fees (usually by selling the home), but you will never owe more than the value of your home. It’s also important to understand that with a reverse mortgage, you, not the bank, own the house, so you’re still required to pay your property taxes, homeowners’ insurance and upkeep. Not paying them can result in foreclosure. To be eligible, you must be 62 years of age or older, have at least 50 percent equity in your home, and currently be living there. You will also need to undergo a fi nancial assessment to determine whether you can aff ord to continue paying your property taxes and insurance. Depending on your fi nancial situation, you may be required to put part of your loan into an escrow account to pay future bills. If the financial assessment finds that you cannot pay your insurance and taxes and have enough cash left to live on, you’ll be denied. Loan Details More than 90 percent of all reverse mortgages offered are Home Equity Conversion Mortgages (HECM), which are FHA insured and off ered through private mortgage lenders and banks. HECM’s have home value limits that vary by county but cannot exceed $1,209,750 in 2025. How much you can actually get through a reverse mortgage depends on your age (the older you are the more you can get), your home’s value and the prevailing interest rates. Generally, most people can borrow somewhere between 40 and 60 percent of the home’s value. To estimate how much you can borrow, use the reverse mortgage calculator at ReverseMortgage. org. To receive your money, you can opt for a lump sum, a line of credit, regular monthly checks or a combination of these. But be aware the reverse mortgages aren’t cheap. You’ll have to pay an origination fee, which is the greater of $2,500 or 2 percent of the fi rst $200,000 of your home’s value plus 1 percent of the amount over $200,000. HECM origination fees are capped at $6,000. You’ll also be charged an initial mortgage insurance premium, which is 2 percent of the loan amount, along with closing costs that will likely run several thousand dollars. Any amount you borrow, including these fees and insurance, accrues interest, which means your debt grows over time. To learn more, see the National Council on Aging’s online booklet “Use Your Home to Stay at Home” at NCOA.org/ article/use-your-home-to-stayat-home. Also be aware that because reverse mortgages are complex loans, all borrowers are required to get counseling through a HUD approved independent counseling agency before taking one out. Most agencies charge between $125 and $200. To locate one near you, visit Go.usa.gov/v2H, or call 800-569-4287. Other Options If a reverse mortgage doesn’t suit you, you could also tap your home equity by getting a regular home equity loan or line of credit. This type of borrowing requires you to make payments, and lenders can freeze or lower limits on lines of credit, but the borrowing costs are much lower. Or you could also sell your home and move somewhere cheaper. Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book. nior ior THE EVERETT ADVOCATE – FRiDAy, MARCH 14, 2025 NEW SURVEY | FROM PAGE 5 The organization released a state-by-state guide on Wednesday showing the escalating cost of child care. Average costs range from $521 per month in Mississippi to as much as $1,893 per month in Washington, D.C., for households with one 4-year-old child, EPI found. Child care is unaff ordable for working families across the country, but especially for low-wage workers, including those who provide child care. EPI analysts said that the time is now for the federal and state government to step in and fi nd a way to provide relief for families beset by soaring child care costs. “Federal and state policymakers can and should act to make child care more aff ordable, and ensure that child care workers can aff ord the same quality of care for their own children,” said EPI Senior Economist in a news release. The Commonwealth of Massachusetts does have programs in place to help families SOARING COSTS— The cost daycare is soaring so that now in some 38 states— including Massachusetts— it is higher than the cost of public college tuition. In 17 states, cost of daycare is higher than rent in those states. (Courtesy Photo) pay for necessary, but highcost daycare. Massachusetts Child Care Financial Assistance programs (CCFA) can help you pay for child care and out-ofschool time programs. It is overseen by the Mass. Department of Early Education and Care. CCFA eligibility is based on who is in your family, income, and certain expenses. “Eligibility” means who can and can’t get the benefi t. If you aren’t sure if you are eligible, family access administrators can help you fi nd out. Go to https://www.mass. gov/how-to/apply-for-fundsto-help-pay-for-child-care for more information. Come sing with Polymnia Choral Society and celebrate 70s and 80s music! olymnia will present “Earth, Wind & Choir! celebrating the music of the 70s and 80s” at 7:30 p.m. on June 7 at Memorial Hall (590 Main St. in Melrose). The annual Pops concert is always a fun experience for both the choir and the audience and includes a sing-along! To purchase tickets, visit https:// polymnia.org/about-our-upcoming-season/ or Miter Biter (479 Main St. in Melrose) or call 617633-5006. Do you enjoy singing and meeting interesting people? P Polymnia Choral Society is always looking for singers of all skill levels. For more than 70 years, Polymnia has been entertaining audiences with performances featuring a wide variety of musical styles: classical, pop, musical theater and more. Come join a community of more than 60 members who love to sing and have fun! Polymnia meets every Tuesday from 7 p.m. to 9 p.m. at Melrose Highlands Congregational Church (355 Franklin St. in Melrose). The next rehearsal is Tuesday, March 25. An ADA-compliant ramp is located on the West Highland Avenue entrance of the church, between Ashland Street and Chipman Avenue. If you have other accessibility needs or questions, please email accessibility@polymnia.org. We welcome all singers to come to any rehearsal and introduce yourself to Music Librarian Pam Ross, President Steve Francis or Vice President David Hammond. For more information, visit www.polymnia.org or call 617-633-5006.
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