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What is Reverse mortgage ūü§Ē‚Ěď

Is Reverse Mortgage a Solution if you retire cash-poor?

Reverse mortgages have never been this popular in Canada.  As a wave of baby boomers crosses the work-life finish line, those who are feeling house-rich and cash-poor, Reverse Mortgage might seem like a good financial alternative.

The basic idea of a reverse mortgage is simple. Instead of making payments to build up equity in your home, as you would with a traditional mortgage, you draw down on your home equity and receive payments. Money currently locked into the value of your home becomes free for you to do more of the things you really want to be doing, like:

  • Home renovations to increase the accessibility and usability of your home’s amenities
  • In-home care
  • Tuition for loved ones
  • Vacationing
  • Investment opportunities
  • Down payment on a second property

Benefits of a Reverse Mortgage:

  • Does not require any payments to be made toward the loan so long as you and your spouse¬†continues to reside in the home on which the loan is drawn.
  • Funds released by a reverse mortgage are tax-free and does not affect Old Age Security payments, Canada Pension Plan payments, Guaranteed Income Supplements or any other government allotted imbursements.
  • You can opt for a lump-sum loan or get a certain amount of cash at regular intervals.
  • You generate some extra income¬†and¬†get to stay in your home.

How to Qualify?

  • Reverse¬†mortgages¬†are only available to Canadians 55 and older who own their home with no mortgages.
  • The overall amount of the loan is capped at 40%-55% of the value of the house depending on lenders.
  • How close you‚Äôll be able to get to the cap depends on your age, your equity stake, the appraised value of your home, where you live and current interest rates, among other factors.

Give us a call/text to learn if Reverse Mortage works for you!

905-306-7000

 

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