SMART MONEY: Paper savings bonds are a thing of the past
DEAR BRUCE: I clipped an answer you gave about transferring paper bonds to Treasury Direct. I went to that site to try to find out what bonds I may have purchased, and I cannot figure out where to go on the site. I have some paper bonds and know they are in a bank safe. Wouldn’t the government still know I had purchased them and have a record somewhere? — Pat, via email
DEAR PAT: It seems to me if you have the bonds in your possession, it shouldn’t be a real problem. I am going to assume you dealt with a broker. If not, go to a broker, explain your circumstance and tell him/her that you will be agreeable to paying a fee to sort out the matter.
You were a little sloppy, and there is a cost involved to put all the bonds in order. Make an appointment to see a broker. Paper bonds are a thing of the past.
DEAR BRUCE: My husband and I are considering a reverse mortgage. We are both retired, living on my husband’s pension and Social Security disability. I am not receiving any assistance. What is the interest rate on a reverse mortgage, and when we inquire, will they want to know what the money is going to be used for? — D.Y., via email
DEAR D.Y.: For many folks, a reverse mortgage is a solid way to tap into equity they have in a home that they wish to continue to live in, but they do not wish to pay back the loan until they pass on. It’s not a bad idea.
One thing you will learn is that the interest rate on a reverse mortgage is higher than on a conventional mortgage. I am not certain where you get the idea that the lender will want to know where the money is going. But if asked, you can be very general — for example, to pay bills, or pay off an existing mortgage, or to use for pleasure.
Reverse mortgages are not for everyone. You didn’t indicate how old you are. Why is that important? Both of you must be at least 62 years old to be eligible. The older you are, the more you will be able to receive.
In other words, if you are both 62, you may have 20 to 25 years left to live. As a consequence, the lender will lend you a relatively modest amount of the equity you have. On the other side of that, if you are both 85 years old, your life expectancy is considerably shorter, and you’ll be able to receive a much larger loan.