Reverse Mortgages and Long-Term Costs

Q: I would like to get a reverse mortgage on my home (nothing owed on it) at a fixed rate for 15 years. Amount would be approximately $70,000. I am a 73 year old widow. Including interest, I would like to know how much my sons would have to pay off. I live in New York state. Thank you.

A: The value of your home and where your home is will determine how much you can borrow. Assuming you have $70,000 worth of available equity, and assuming an interest rate of 5%, the total amount to be repaid would be $99,640. You will need to complete a HUD-sponsored counseling program before you can get your Home Equity Conversion Mortgage (HECM), and you'll want to talk to a few mortgage lenders about interest rates and costs. There is word that HUD is considering making changes to their program in order to help lower the up-front costs, too.