Reverse Mortgage

Reverse Mortgage Overview

Do you own your home? Have you already built home equity? Are you looking for a non-invasive way to appreciate the value in your home without needing to sell it?

If so, a reverse mortgage (sometimes called ‘equity release’) may be an exciting option for you. Depending on your unique borrowing situation, a reverse mortgage could be a great way to live comfortably without upsetting your lifestyle.

I'm a trusted licensed mortgage broker with extensive experience in helping homeowners (just like yourself!) enjoy optimal mortgage solutions.

As a licensed mortgage broker, I have a fiduciary duty to act in the best interests of my clients - your mortgage needs will always be put first and I would never recommend a reverse mortgage if it wasn't a good fit.

It's very important that you make informed decisions regarding your mortgage - a reverse mortgage may work brilliantly for some people, and not be as attractive of a mortgage solution to others.

Continue reading below to learn about the ins-and-outs of reverse mortgages, and feel free to give me a call if you have any questions!

The A, B, C's Of A Reverse Mortgage - How Does It Work?

If you own your home and are 55+; with a reverse mortgage, you are essentially receiving a 'pay-cheque' (loan) from the home equity you already have.

Many borrowers use a reverse mortgage to make their retirement more comfortable, whether it be for opportunities to travel or simply to cover every day expenses such as medications and groceries.

A reverse mortgage opens up the opportunity to access tax-free funds with no monthly payments.

You maintain home ownership with a reverse mortgage, meaning the title of your home stays in your name and your heirs can still inherhit your home.

With a reverse mortgage you’re usually entitled to borrow up to 55% of the current value of your home, with the approved amount being dependent on your lender, your age (and the age of other borrowers registered on the title of your home), and your home’s condition/appraisedvalue.

Paying Back Your Reverse Mortgage

A reverse mortgage is a loan that's been secured against the appraised value of your home; it can sometimes carry higher interest rates than a regular mortgage.

With a reverse mortgage you're usually not required to make regular mortgage payments, but you often have the option to repay the interest and principal balance back at any time.

The balance on your reverse mortgage needs to paid back when:

• The last borrower on title passes away
• You move out of your home
• You sell your home
• You default on the reverse mortgage - (this can occure if you use the funds for illegal purposes, committing mortgage fraud on your application etc.)

Benefits And Considerations Of A Reverse Mortgage

As noted earlier, I want you to be fully aware of the good-the-bad-and-the-ugly of any mortgage decision you make.

As a licensed mortgage broker, I value an honest picture.

My goal is to find you a mortgage solution which you'll absolutely love (not one you'll end up regretting). I don't believe in 'quick-fixes', I'd rather see you with a mortgage solution which is well-thought out and will benefit you in the long run!

Let's dive into some valuable information below weighing some of the benefits and considerations of a reverse mortgage.

Benefits Of A Reverse Mortgage

Remember that reverse mortgages aren’t ‘one size fits all’.

Everybody’s situation differs slightly from the next; the following benefits and considerations are generalized guidelines for many borrowers.

Reverse Mortgage Benefits

• It may provide the opportunity to access cash without having to sell your home (you can keep living in it through out your retirement)
• No regular payments are required
• There is often flexibility to organize how much money you receive, and when. You can choose from the full amount upfront, or monthly deposits
• No tax is paid on the money you borrow
• If you receive Old Age Security (OAS) or Guaranteed Income Support (GIS), the money received from a reverse mortgage won't affect it
• A reverse mortgage can help you live more comfortably, or open you up to opportunities such as travel or paying for a loved ones post-secondary education
• You get to enjoy some of the benefits of the home equity you've worked your whole life to build

Considerations of a Reverse Mortgage

Having the facts at hand can help you make an informed decision regarding whether a reverse mortgage is right for you.

Reverse Mortgage Considerations

• With a reverse mortgage, if you plan on leaving your estate to your heirs, there may be less money available to leave
• When you pass away, your estate may have a set period of time to repay the reverse mortgage
• Interest rates can sometimes be higher with a reverse mortgage than products such as a Home Equity Line of Credit (HELOC) or regular mortgage
• As you accumulate interest with a reverse mortgage, the home equity you have may decrease

Depending on your lifestyle and goals, there may be other factors to consider.

Before making any decisions, we'll have a transparent, confidential discussion regarding your unique borrowing situation to help discover whether a reverse mortgage is a suitable option for you.

Eligibility Requirements For A Reverse Mortgage

You likely wouldn’t have read this far if you weren’t at least 55 years old, which means we’re already one step closer to you qualifying for a reverse mortgage!

To be elgibile for a reverse mortgage, common guidelines are that you:

• Are a Canadian homeowner
• Have received independent legal advice (if it was requested by your lender)
• Are using a home for the reverse mortgage which is your primary residence (you live in it for atleast 6 months/year)
• Are a homeowner in a region which allows reverse mortgages
• Have an appraised home value of $250,000

Eligibility criteria may differ by lender - chat with an experienced licensed mortgage broker (such as myself) to find out if you qualify!

A Reverse Mortgage To Consolidate Debt

Life doesn't always go as planned, and sometimes we find ourselves in less than ideal financial situations.

One day you're sailing the high seas, and the next you're struggling to make ends meet.

A reverse mortgage can also be used to help pay down a line of a credit or consolidate debts.

Other mortgage solutions exist for managing debts - I'd be happy to explore a reverse mortgage and other mortgage options with you to help get you back on track financially.

Ensuring The Best Fit

Your home equity was a significant investment - any decisions regarding it should come from the help of somebody you trust and are comfortable with.

I'm Kyle Benzies (licensed mortgage broker); my best interests are making sure your best interests are listened to, and followed.

A reverse mortgage is a mortgage product which often raises many questions. It'd be my pleasure to help you better understand how a reverse mortgage works and how it may impact you financially.

It's understandable that family members are often concerned over their loved ones assets (and they have every right to be!), I'd be happy to hold space for an open conversation if any of your family members have questions or concerns regarding a reverse mortgage. It's important that they understand what a reverse mortgage is too!

For more information regarding a reverse mortgage or to see if it's right for YOU, feel free to give me a no-risk phone call!

***other conditions may apply to anything listed above. The information provided on this page should NOT be implicitly relied upon, and may not be 100% up to date. It's best to contact us for the most current conditions/program offerings for first time buyers***