Reader decides to hold off on reverse mortgage

A few weeks ago, I shared some advice for a reader named Shirley, who was wondering whether she should get a reverse mortgage.

As you may recall, Shirley wrote that she owns her home "free and clear" and had been approached by people who encouraged her to apply for a reverse mortgage, even though she may sell her home soon and doesn't need the money right now.

A reverse mortgage is a loan against your home that you don't have to pay back for as long as you live there. It can be paid to you all at once, or at times and in amounts that you choose. You must be at least 62 to get one, and the loan does have to be repaid in full, including interest, when the last living borrower dies, sells the home or permanently moves away.

In response to the question, my friends at Smedley Financial Services in Salt Lake City advised that Shirley probably should wait, because she doesn't need the money and wouldn't be able to cover the costs of a reverse mortgage if she decided to sell her home.

Shirley let me know last week that she intends to take that advice.

She wrote me a follow-up e-mail to say she appreciated the suggestions from Smedley, as well as information about reverse mortgages that she found on the AARP.org Web site.

"I have decided not to get the reverse mortgage, at least at this time," Shirley wrote. "I just don't know if I'll stay in this house, or what else may come up. For now I'm OK, but I will keep this door open if I need to in the future. After all, my house is where most of my assets are."

Good call, Shirley. But I'm not just revisiting this issue in order to give you a pat on the back!

Shirley wrote that she still thinks the idea of a reverse mortgage is a good one, and I agree.

"I remember when I first heard about them, I heaved a great sigh of relief to think there might be a way to keep me solvent if the time came when I needed to tap into it," she wrote.

A person who posted a comment about the initial column online at deseretnews.com echoed Shirley's feelings.

"Reverse mortgages are a great product — in the right situation," the online post read. "There are advantages and disadvantages to getting one, and the key is finding someone who will adequately explain them to you.