The Question is “Can you get a reverse mortgage on a condo in Canada?”
You can get a reverse mortgage on a condo as long as you own the condo, its your principle residence, the value is at least $150,000 and you have equity in the condo.
Can I Get A Reverse Mortgage On A Condo?
Can you get a reverse mortgage on a condo in Canada? The answer to this question is yes, you can get a reverse mortgage on a condo as long as you own the condo, its your principle residence, the value is at least $150,000 and you have equity in the condo. Let’s go into a little bit more detail regarding a reverse mortgage on a condo property. First of all, you need to be a minimum of 55 years of age, the condo also must be in the title of your name, or your name and your spouses name to begin the process of determining eligibility.
The next thing to determine is how much equity you have in the condo as you must keep in mind the maximum loan to value you can receive in a reverse mortgage is 55% of the appraised value of the condo.
If your condo is worth $500,000 with no current mortgage on it, the maximum amount you could receive is $275,000 in a Reverse Mortgage.
Also, to be taken into consideration is the location and future marketability of the condo. A combination of the above are taken into consideration to determine how much equity you will receive out of the condo.
One more factor is taken into consideration is your marital status. Whether or not you are married or single makes a difference as typically married people live longer and studies show report males live longer than females. This will also be a factor in determining how much equity you can receive in a Reverse Mortgage on your condo.
If you are married and your spouse is not 55 years of age you will not be eligible for a reverse mortgage. If you have adult children and they are currently on your traditional mortgage and you wish to switch it to a reverse mortgage your children will not be able to remain on title unless they are 55 years of age and the condo is also their principle residence.
If you are successful in obtaining a Reverse Mortgage on your condo you are not required to make any payments on the Reverse Mortgage, however, you are required to maintain the condo in satisfactory condition, maintain the proper insurance on the condo, pay the condo fees and the property taxes.
It is important to remember the benefits of a Reverse Mortgage. The first benefit is you don’t need to make a mortgage payment, the second benefit of a Reverse Mortgage is you have the choice to either have your house pay you back either in a lump sum payment or you can choose a monthly income payment. Either of these options give you tax free cash which does not affect your government pension incomes.
Seniors today who have opted for a Reverse Mortgage are finding they are able to keep their current standard of living while maintaining ownership of their home, having less financial stress and an increase in cash flow.
Your Reverse Mortgage offers you the flexibility to take cash out of your home which you can use at your discretion. Whether you want to take your family on a dream vacation, update your home, start a new hobby, maybe even go back to school, whatever it is that you want to do with your money from your Reverse Mortgage is up to you.
Its also important to remember the difference of a Reverse Mortgage versus a Home Line of Credit. A line of credit will always require a monthly interest payment and it is also a demand loan. This means your lender can call this loan in on demand if you or your spouse passes away. The Reverse Mortgage will never be called to be paid in full if you or your spouse passes away.
The only time you must repay your Reverse Mortgage is when you sell your home this giving you complete confidence you can maintain home ownership while living in your home with a Reverse Mortgage and not having to make a payment.
If you would like more information please contact me for a FREE consultation, with no commitment. Isn’t it about time your house started paying you back so you can have more fun and less financial stress in your retirement years?
Expert Advice to Guide You Home
Can a family member be added to a reverse mortgage?
Other family members such as your children even though they may be adults they are not eligible to apply for a reverse mortgage or be on title of your reverse mortgage if they do not meet the minimum age requirement of 55. If you happen to pass away and your property has a Reverse Mortgage on it and you have left your property to other family members, they will not be able to assume the Reverse Mortgage as they will not meet the required criteria at this time.
What Makes A Good Mortgage Broker?
There are a lot of qualities that can be mentioned here, to determine what makes a good mortgage broker. Like most of these questions, context is important. Above all, the sign of a good mortgage broker, is the mortgage broker who listens to you and tries to understand your goals, and your needs. A good broker, also takes the time to explain his or her role, and set expectations. A good broker will be direct with you, never beat around the bush.
How does a reverse mortgage work if you own your home?
If you already own your home reverse mortgage works by taking a part of your home equity and using it to pay off your current mortgage, assuming you do have one. Since you don’t have a mortgage debt to pay off, you’ll collect the whole loan proceeds if you buy your home free and simple.
How A Mortgage Broker Can Help?
A mortgage broker is a legally approved licensed specialist who has connections with various lenders and mortgage products. They have the knowledge of many types of mortgage products and rates and offer you a wide variety of options to choose from. You can compare between various lenders, rates and other factors and choose wisely.
What happens when you sell your home with a reverse mortgage?
When you sell your home with a reverse mortgage the title company will send the required payoff amount to your reverse mortgage lender once your house has sold. Ascertain that the reverse mortgage loan is fully paid off with the proceeds and that your lender account is closed. Any extra money will be given to you.
What Questions Should I Ask A Mortgage Broker?
The top 2 questions that I would recommend asking a mortgage broker, or anyone that you are speaking to who is offering you mortgage advice (this includes your bank, your friends, your parents). What type of mortgage did you get, and why? What was your thought process, or strategy behind selecting your mortgage product? What strategy are you recommending for me, and why (what is it based on).
Are reverse mortgages transferable?
Reverse mortgages are not transferable and it usually belongs to one person or two married spouses. If one spouse dies but the surviving spouse is identified as a co-borrower on the reverse mortgage, the surviving spouse will stay in the house and the loan terms remain unchanged. Adult children and other nonspouse descendants, on the other hand, must pay off the debt when the last borrower dies. They have the option of keeping the house or selling it.
Are Mortgage Brokers A Good Idea?
When mortgage brokers first came on the scene, many years ago, the thought was that they were only there to help you get financing when you were desperate and your bank turned you away. Today, thanks to mortgage brokers, we have access to a competitive marketplace. Yes, that is right. Mortgage brokers keep the industry competitive by their very nature. By bringing options and choice to the consumer, it forces the banks to remain competitive for your business.
What happens at end of reverse mortgage?
At the end of a reverse mortgage, the loan must be repaid when the last surviving borrower passes away. Most of heirs will sell the house to pay back the loan. The heirs will not have to pay more than 95% of the appraised value if the loan balance exceeds the value of your home.
Are Mortgage Advisors Free?
The short answer is Yes, there is no direct out of pocket cost to you when using a mortgage broker. The way that the mortgage industry works, even if you are going in to your bank and using a mortgage advisor in branch, or you are using a mortgage specialist from a bank, who is paid on commission and not a salary, or a mortgage broker, who has access to more than just one bank and one lending product, the cost of the service is built into the pricing of your mortgage rate.
If you would like more information or a free consultation to see if a Reverse Mortgage is a fit for you, you can contact me below, and as a Certified Reverse Mortgage Specialist I would be more than happy to review your financing options with you and provide you with Expert Advice to Guide You Home.