Poor Credit Score Affects Refinance Rate

If money is tight, buy a used car. People are getting great deals on reliable used cars with low mileage thanks in part to the knuckleheads who have to turn in their leased vehicles. As one financial planner told me, leasing a car for business purposes is okay, but never for personal use.

I'm hoping you can help me understand reverse mortgages. My mom is in her early sixties and has virtually no income because of a sluggish job market where she lives. Her area (Boston) also has an extremely expensive and quirky real estate market such that it doesn't make sense for her to sell the house. She lives in a modest house in a fancy neighborhood, so basically she's house-poor. What would be the pros and cons of a reverse mortgage for someone like her?

Reverse mortgages are available only to homeowners 62 and older. This type of loan allows seniors to convert the equity in their home into tax-free cash, without selling, giving up title or having to make a mortgage payment.

A reverse mortgage doesn't have to be repaid until the homeowner moves, sells or dies. Borrowers can take the loan as a line of credit, a lump-sum payment, fixed monthly payments or a combination.

The downside of this loan product is the high fees. To get an estimate of the fees you may be charged, try the reverse mortgage calculator at the National Reverse Mortgage Lenders Association's Web site ( http://www.reversemortgage.org ).

Before you contact a lender about a reverse mortgage, visit AARP's Web page on the topic ( http://www.aarp.org/revmort ). On the site, you can download AARP's free booklet "Home Made Money: A Consumer's Guide to Reverse Mortgages." To order a free copy of the guide by telephone, call 800-209-8085.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.

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· By e-mail:singletarym@washpost.com.

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