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The Big Move: I want to refinance my mortgage, but I’m about to turn 70. Is it wise to refinance at my time of life?

Dear MarketWatch,

I hope you can help me figure this out. I am 69 years old and will turn 70 at the end of the month. I’ve been offered a cash out refinance loan and need to decide whether to take a 15- or 30-year loan. My monthly obligation would obviously be higher for the 15-year loan.

I may not — likely will not — live long enough to pay off either, or even conclude the 11 years remaining on my current mortgage, for that matter. I’m diabetic, let alone other infirmities. The mortgage lender knows my age, but the choice is mine.

Normally I guess one’s heirs would have to deal with it, based on the will, but I don’t have any heirs in my opinion. I’m single, have never been married and have no kids. My mother is deceased, and my father is 97 years old. He lives with a woman, but they chose not to marry.

My brother and I have been estranged since 1990. I don’t intend to bequeath him anything of value — he ripped me off big time when our mother died, besides the fact I don’t actually have anything of much value. I don’t wish to leave him a mess. He is 67 years old, and who knows if he’ll be living when I die. Then there’s my niece, his only child, whom I barely know. She’s never attempted to rectify that fact since becoming an adult. She’s 38 years old, is single and has no kids. I have 33 or more second cousins, but no relationship for almost 30 years with the few I ever met.

My hurt and resentment regarding my brother and niece shouldn’t negate my obligation to leave a will. They are my blood, after all, and I’m not emotionally attached to any nonprofit. I have close friends I met as early as 1954 to 1966, but no significant other.

Meanwhile, I owe around $33,000 on my current mortgage. I’m asking for a $30,000 cash out, which I intend to use for home improvement. The appraisal is waived, but the same size units in my condo have sold for between $285,000 and $315,000. I live in a suburb of Los Angeles. The current monthly payment is $458, including property taxes, with an interest rate of 5.25%. The new payment is $531 at 3.28%. Not a whopping difference considering what all the commercials say current refi rates are, but my debt-to-income ratio is no bueno.

“Feel free to think of more than just blood relatives when considering heirs.”

If I may overstep just a bit, I would advise you to reconsider who is worthy of receiving your inheritance. By nature, most of us think of leaving our worldly possessions to blood relatives — but in my view, the definition of family is broader than that. Your brother brought you grief, and you say you have virtually no relationship with your niece.

It does sound as though you have many friends with whom you have rich relationships. Sure, they may not be romantic in nature, but I’m sure these friends bring joy and comfort to your life. These people are your chosen family, and they deserve every right and privilege that’s typically reserved for blood relations. Indeed, you can bequeath your possessions to a friend rather than a family member.

Perhaps your friends may not be interested in inheriting your condo, but I would talk to them to see what they would think of such a gift. Maybe they themselves have a child or other relative who could benefit from inheriting a home to live in (or the financial value of that property.)

You’ve worked hard to maintain your home, and you should feel comfortable knowing that it’s going to someone you care for after you pass away. Whoever you do identify as your heir, let them know of your plans. That way it won’t come as a shock upon your passing, and they can feel well equipped to handle the various tasks that come with an inheritance.

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