A Reverse Mortgage
Is a loan available to seniors and is taken out against the value of a home. These funds are advanced in the form of either fixed monthly payments or a line of credit.
Reverse mortgages allow seniors to use the equity they have built up in their home over time to defer their monthly mortgage payment until they pass away, sell, or move out of the home. This type of mortgage is ideal for seniors as it offers the many valuable features discussed below:
Reverse Mortgage funds you borrow are tax-free and can be taken in:
- A one-time lump sum
- Planned advances
- A combination of the above options
Either way, no payments are required until you choose to sell or leave your home, and the total amount borrowed can be up to 55% of the value of your home.
Reverse Mortgage Eligibility
Reverse mortgages can serve seniors who have strong equity in their home but are living on a fixed income. While many think “senior” starts at 65 years, reverse mortgages are available to those 55 years and older.
Reverse Mortgage Borrowing
Reverse Mortgage loans rely on a number of factors, including home value, your age, your mortgage balance, where you live, and current interest rates. In most cases, an older senior is more likely to get a higher reverse mortgage than a younger senior.
There are no restrictions on how you choose to use the proceeds of your reverse mortgage. This means that you can use the funds to settle debts, travel, pay medical expenses, renovate your property – or whatever else you may need.
What Are The Main Benefits?
Let’s recap the main benefits of a Reverse Mortgage, as identified by the Canadian Government:
- You don’t have to make any regular loan payments
- You may turn some of the value of your home into cash, without having to sell it
- The money you borrow is a tax-free source of income
- This income does not affect the Old-Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may be getting
- You still own your home
- You can decide how to get the funds
How The Mortgage Station Can Help
We thoroughly understand the in’s and out’s of how Reverse Mortgages work in Canada. With your best interests in mind, we’ll help to ensure you’re in a financially secure position as you age. We also provide access to:
- A team that works with over 40 Canadian lenders
- Five sources of mortgage funds in Canada
- Fixed or variable rate products, which can be used to free up cash flow
- Many unique tools that will meet your individual refinance needs
- Multiple options to assess property values
- A network of lawyers
To learn more about Reverse Mortgages, contact The Mortgage Station today at 1.877.512.0007.