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Question for the Money Doctors

Question submitted on Apr 27, 2011.

Question

I am a 63 year old female. I am still working. I need money for necessary repairs on my home. Now that the interest rates are low should I refinance or take money out of my retirement savings plan? I often get information about reverse mortages, but I don''t think I want to go that route

Answer

Without knowing a lot about your personal tax and financial situation, my initial reaction is that you should refinance or take out a home equity line of credit.  Other things to consider that might affect this recommendation are:

1.  What is your home worth?

2.  What is your current mortgage balance?

3.  What is the current interest rate?

4.  How much money do you need for the repairs?

5.  What is your current marginal income tax rate?

6.  Do you currently itemize your deductions?

7.  What are the closing costs for a refinance or a home equity loan?

I agree with you about the reverse mortgage, but again, I would need more information.


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