Do you have Dreams and Goals for your retirement?
Are you a homeowner over 55?
You may be able to enjoy the benefits a reverse mortgage offers you. Find out more now.
What is a Reverse Mortgage?
Have you been wondering what exactly is a reverse mortgage? Maybe a reverse mortgage is something you have heard about in conversations with friends and family or maybe it is an option that is completely new to you. Either way, you will want to get some clarity before taking any steps forward.
What is a Reverse Mortgage? A reverse mortgage is a safe and simple way to access funds that would otherwise stay locked in the equity of your home.
The big benefit of a reversible mortgage is that the lender pays you, instead of you paying the lender! Whether you choose to receive a portion of your home’s value in monthly payments, a lump sum, or in the form of accessible credit, you can improve your standard of living by turning part of your home’s value into tax-free cash. The best part of a reverse mortgage is you can defer monthly payments until you sell your home.
Key Facts about Obtaining a Reverse Mortgage
- You must be a Canadian homeowner who is over 55 years of age to be eligible
- You can receive up to 50% of your home’s value, depending on your age
- No payments are required until you sell your home
- You can submit your information now to find out how much you qualify for and to receive our free information package.
For answers to more of your important questions, see our Frequently Asked Questions.
Many seniors look forward to embracing the new opportunities this new phase of life offers them. Taking advantage of your home’s value and extracting the equity is a smart, safe way to improve your lifestyle and do the things you want to do.
Contact us and we will connect you with an expert who can guide you to the best solution for your individual needs.
How Reverse Mortgages Work
Do you qualify for a reverse mortgage?
- Are you a home owner in Canada?
- Are you 55 years of age or over?
- Is your current mortgage under 40% of your home’s total value?
If you answered yes to these questions, you are eligible!
What are the Downsides of Reverse Mortgages and How Can I Avoid Them?
The downside to a reverse mortgage is usually associated with what you intend to use the money for. For example: taking $200,000 out of your home to go to Las Vegas may not be the best use of your home equity! There are also many common misconceptions about reverse mortgages. One common misconception is that Canadian reverse mortgages are the same as those offered in the US; they are in fact very different financial instruments, with far more consumer protection offered in Canada.
Is a reverse mortgage suitable for me? Simply provide your information and one of our experts will contact you.
Frequently Asked Questions
- Will my house still be mine?
The answer is simply, yes. You are free to renovate, sell, or do anything else you wish to do as long as you and your spouse continue to occupy the home.
- Are interest rates on a reverse mortgages higher than a line of credit or a regular mortgage?
Interest rates on a reverse mortgage are very competitive and remember, unlike a regular mortgage, you have the option of never making an interest payment until you sell your home.
You can view the Current Interest Rate Sheet HERE.
- Because I don`t need to make any payments, won’t all my equity be gone, with nothing left at the end?
If you choose not to make any payments, your loan will increase over time. But since inception, over 99% of homeowners have money left over when their loan is repaid, and on average the amount left over is more than 50% of the value of the home when it is sold. The reasons for this remaining equity are:
· The conservative lending limit (up to 50%)
· The fact that most homes continue to grow in value
- Is it possible for me to owe more than the value of my home?No. The loan is guaranteed to never exceed the fair market value of your house. You can rest assured that your reverse mortgage will not be a burden to your heirs.
- I heard it was really costly to arrange a reverse mortgage and I don’t have that money available to set it up. Is this true?
Set up costs are as follows:
- Appraisal Fee
- Typically from $175 to $250 as an out-of-pocket cost.
- Actual amount varies by province and for urban and rural properties.
- Request for an independent appraisal is ordered through HomEquity Bank.
- Independent legal advice is required
- Typically $300 to $600, which can be paid out of the proceeds of the loan .
- Price range assumes no title issues.
- At your request, HomEquity Bank can provide a list of legal advisors in your area.
- It is recommended that you discuss fees with the legal advisor before proceeding.
- Legal, closing and administrative costs
- Costs range from $495 to $1,495 depending on the interest term you choose.
- These costs will be deducted from your CHIP Home Income Plan funds so they are not an out-of-pocket expense.
- Cost includes title search, title insurance and registration
When all is said and done, the cost is very similar to arranging a typical mortgage loan.