Consider reverse mortgage before buying a mobile home

Question: My wife and I are in our late 60s. We have lived in our house for 33 years. But it still has a mortgage because we refinanced over the years to pay for remodeling and upgrades.

We lost most of our IRAs to the falling stock market in 2000. Our biggest asset is our home equity. We are thinking of selling our house and buying in a senior mobile-home community. We could buy a mobile home and still have enough money to meet our expenses. Is this a good thing to do?

Answer: If you have at least 60 percent equity in your house, you might consider obtaining a reverse mortgage to pay off your existing home loan in a lump sum so you can afford to stay in your current house. Then you would have no monthly payments.

That would be much better than downsizing and giving up your home, which is an appreciating asset. Mobile homes usually depreciate in market value, just like your car.

Before deciding to sell your house to buy a mobile home and make a major change in your lifestyle, I suggest renting for a few months in a mobile-home park to see if that's where you want to spend your future.

Living trust details

Q: I am getting my paperwork together to do a living trust. How do I transfer my property title into my living trust? I presume it gets recorded with someone, maybe the registrar of deeds?

A: After your living trust is written the way you want, specifying who is to receive your assets after you die, and who you want to be your successor trustee, then you must fund your living trust by transferring your assets into it.

This is usually done by a quitclaim deed. For example, you could transfer your real estate title from Nancy to Nancy as trustee of your living trust. An excellent book with sample living-trust forms is Make Your Own Living Trust, Seventh Edition, written by attorney Denis Clifford.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.