Now We Know!
June 4, 2021True or False
June 9, 2021While in our twenties and thirties we drilled down on our mortgages to pay them off. So it’s understandable that people baulk when we talk about reverse mortgages. We need to try to change our way of thinking. What’s important at this time of our lives is the QUALITY OF LIFE!
Now more than ever, Canadians are outliving their savings and relying on reverse mortgages to generate cash flow from the equity in their home. Of course, there are other ways to release the equity in your home:
– Home Equity Line of Credit (HELOC) You are required to at least make interest payments.
– A Regular Mortgage You would need to qualify, prove income, employment history, and so on. You would have monthly mortgage payments.
– Second Mortgage You are required to at least make interest payments, usually over a short time. The interest rate and fees can be quite high.
THE ONLY OPTION THAT DOES NOT REQUIRE PAYMENTS IS A REVERSE MORTGAGE.
With reduced income security and the decrease in defined-benefit pensions, mortgages and Home Equity Line’s of Credit (HELOC), may not be available to many older Canadians. And with Canadians facing the need to cover the costs of their retirement that may last well into their nineties, a reverse mortgage may be the best available option.
Just a few advantages of a reverse mortgage:
- No monthly mortgage payments
- You maintain title, ownership and control of your property
- You don’t have to prove your income in order to qualify
- The money is 100% Tax Free
- Does not impact your government benefits such as Old Age Security or Guaranteed Income Supplement
- You can turn some of the value of your home into cash, without having to sell it
- You can decide how you want to receive the money – you can take it as a lump sum, a regular payment, or a combination of the two
- The amount you owe can never exceed the value of your property
- You don’t have to pay back the loan or interest until you sell the home or pass away
- If one spouse passes away, you can still live in your home without the worry of mortgage payments
- The money from a reverse mortgage is yours to use as you wish.
- Pay down debt and supplement income
- Fund renovations that let you stay in your house longer
- Pay for long-term care
- Provide bridge financing if you wait to take Canada Pension Plan or Old Age Security benefits
- Cover health care expenses
- Help your children / grandchildren with a down payment to purchase their own home
- Go on a long-needed holiday
We deal only with two (2) Federally Regulated banks, Equitable Bank and Home Equity Bank. They have all the rules and regulations that you’d expect from any Canadian bank. Your home, your reverse mortgage is safe and secure.
