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We take the time to understand your unique plans. There are often other options to consider and you should have all the facts. Once you understand the reverse mortgage option and the associated costs and interest rates you may consider a conventional refinance, or to sell and down-size or other possibilities. The decision has to be right for you and your family.
The qualification process for a reverse mortgage is much simpler than a conventional mortgage as your home provides the equity and there are set guidelines for the amount of your home's value you can unlock at your specific age. That value is determined by a combination of your age and an independent home appraisal. Credit rating and income are NOT determining factors for approval.
Reverse Mortgages can fund quite fast once you have gone through the approval process and received Independent Legal Advice from a trusted advisor. Any secured debt, such as existing home credit lines or mortgages, will be paid out in full along with any other debts you specify. The remaining funds are settled into your chequing account.
How does a Reverse Mortgage work?
A Reverse Mortgage is secured by the equity in your home. Unlike a traditional mortgage in which you make regular payments to the lender. The big advantage with a Reverse Mortgage is that you do not have to make any regular mortgage payments for as long as you or your spouse lives in your home. That’s what has made reverse mortgages such a popular solution in Canada, the U.K., the U.S., Australia and other countries.
Who is it for?
A Reverse Mortgage is designed exclusively for homeowners age 55 and older. This age qualification applies to both you and your spouse.
How much can I get and how is it calculated?
You can receive up to 55% of the value of your home. The specific amount is based on your age and that of your spouse, as well as the value of your home.
How do I receive the money?
You can choose how you want to receive the money. A Reverse Mortgage gives you the option of receiving all the money you’re eligible for in one lump sum advance, or you can take some now and more later, or you can receive planned advances over a set period of time.
Could I owe more than the house is worth?
You keep all the equity remaining in the home. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid. The equity remaining depends on the amount borrowed, the value of the home, and the amount of time that’s passed since the reverse mortgage was taken out.
Will the bank own the home?
No. The homeowner retains title and maintains ownership of the home. It’s required for the homeowner to live in the home, pay taxes on time, have property insurance, and maintain the property in good condition.
What if the homeowner has an existing mortgage?
Many of our clients use a reverse mortgage to pay off their existing mortgage and debts.
Should reverse mortgages only be considered as a loan of last resort?
No. Many financial professionals recommend a reverse mortgage to supplement monthly income instead of selling and downsizing, or taking out a conventional mortgage or a line of credit.
What fees are associated with a reverse mortgage?
There are one time fees to arrange a reverse mortgage such as an appraisal fee to confirm the value of your home, a fee to your lawyer for independent legal advice, title insurance, administration and registration.
What if the homeowner can’t afford payments?
There are no monthly payments required as long as the homeowner is living in the home.