The question is “Can you lose your home with a reverse mortgage?”
It is almost impossible to lose your home with a reverse mortgage since you borrow against your home’s equity and repay the loan with the proceeds of the sale. There aren’t many ways to lose ownership of a reverse mortgage because you still own your house, unless you fail to preserve three primary components of your home’s legal status.
In Canada, there are 2 lenders providing Canadian Seniors with the option to finance their home with a Reverse Mortgage. The 2 lenders are federally registered Schedule 1 Banks which means they are regulated under the Bank of Canada Act providing assurance you will not lose your home with a Reverse Mortgage.
The lending guidelines for Reverse Mortgages are very conservative, they will only lend to a maximum of 55% of the value of your principle residence. The maximum amount is determined by a recent appraisal from a Certified Real Estate Appraiser minus any outstanding encumbrances on your home such as a mortgage or a secured line of credit.They also take into consideration your age, marital status, and property location. The older you are the more equity you will be able to access.
For example, if you are in your late 70’s or early 80’s most likely you will receive the 55% maximum, given the other criteria is met versus if you are 65 years of age you may only receive 30-35% of the value of your home, minus any other encumbrances on registered against your property.
With the real estate market values trending upwards year after year your home value is increasing always leaving you plenty of equity in your home when it is time for you to sell. You only have to repay your Reverse Mortgage when you sell your home.
If you are married and one spouse passes away you are not required to repay the Reverse Mortgage at this time. It is only when you sell your home do you repay the Reverse Mortgage.
There are several reasons why seniors today opt for a Reverse Mortgage versus other traditional financing. The main reason is the fact there are no monthly obligations, not even an interest payment like a secured home line of credit requires.
Financial freedom, less stress, the ability to remain in your home as you age are a few reasons why a Reverse Mortgage is so attractive. The equity out of your home is tax free and does not impact your pension incomes. You can also receive your equity as a lump sum or a monthly deposit to top up your pension income. This is your equity, you can use the money for whatever you wish.
If you would like more information please contact me for a FREE consultation with no commitment on your part. Learn why many Senior Canadians are opting for a Reverse Mortgage in their retirement years.
Who is eligible for a Reverse Mortgage?
You are eligible for a Reverse Mortgage in Canada if you are a Canadian homeowner and at least 55 years old. If you have a spouse, the spouse must also be 55 years or older to be eligible to become a co-borrower. However, more parameters are considered in order to qualify.
What Does A Mortgage Specialist Do?
A mortgage specialists work with you to obtain the best mortgage for you. A mortgage that works for you and meets your needs, not the banks. They do not work with just one bank or lending institution, s/he has relationships with many. Based on your needs, a mortgage specialist will go over your goals and your needs with you, and will use this information to identify the best lending product for you.
With a reverse mortgage who retains the title to the home?
A reverse mortgage allows the homeowner to keep their house as long as they pay their property taxes, maintain it, and keep it insured. You will be responsible for the valuation fees, legal fees, and other costs associated with the sale of the land. The borrower retains ownership of the land, including any unused equity, and is never required to leave.
Do I Need A Broker To Buy A House?
When using the term “broker” what are we referring to ? The term can be used to refer to a realtor (real estate broker), or a mortgage broker. In either case, the answer is NO, you do not need a broker to buy a house. Just like you do not need a lawyer to go to court and fight your case. Nor do you need a travel agent to book your trip. You can also say the same thing about a mechanic, to change your brakes.
What Is Reverse Mortgage?
A Reverse Mortgage is a loan product secured by a principle residence enabling the homeowner to access the equity of the home and not make traditional mortgage payments on the loan. According to a recent study, 93% of Canadians want to remain in their home as they age. Access to traditional lending becomes limited for seniors as the income isn’t always there to support the lender guidelines.
How Much Is A Mortgage Advisor?
When using the services of a mortgage advisor, when it comes to how they get paid. There are out of pocket costs for the set up and closing of your mortgage and property, however, which you should be aware of well in advance of your closing. But as far as how much a mortgage advisor costs, well we have to back track a little bit and get an understanding of the way that the mortgage industry works.
Who is not eligible for a reverse mortgage?
You are not eligible for a reverse mortgage if you do not meet the minimum age requirement of 55 years of age, and if you do not own your principle residence with a fair amount of equity in it you will not be eligible for reverse mortgage. It doesn’t mean you won’t ever be eligible just means at this current time you are not eligible.
What Do I Need To See A Mortgage Advisor?
This varies depending on the individual policies and procedures. For us, the best place to start is with a 20 minute phone call. You do not need anything. If we get to it, the most skill testing question we will be asking you is what is your SIN. The rest of the information you should have available at the tip of your tongue. During this initial call we are often able to address 99% of your questions or concerns.
Can you get a reverse mortgage on a condo in Canada?
Another factor is the location of the property the type of dwelling on the property and the overall marketability of the property. So let’s start with the location of the property. The location of the property must be in an urban centre, it cannot be a rural property or an agricultural zoned property. It must be the applicants’ owner occupied principle residence and this can either be a single family home, an apartment style condo, a high rise condo or a town home.
Is It Better To Get A Mortgage From A Bank Or Mortgage Company?
This is a great question – is it better to get a mortgage from a bank or mortgage company. There are benefits and short comings with any mortgage product, be it from a mortgage company, or from a bank. The key is, understanding your situation. Being crystal clear on your goals, not only for the short term, but medium term and also the long term. Once you are crystal clear on your goals, you also want understand your demographics.
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.