The question “with a reverse mortgage who retains the title to the home” is common among consumers and we will try to clarify it.
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 keep title of my home with a reverse mortgage?
Yes. As with a traditional mortgage where title remains in your name, the same occurs with a reverse mortgage. The biggest difference with a reverse mortgage opposed to a traditional mortgage is the fact that you do not make the regular payment on the mortgage loan.
The myth that is often circulating around who has title of the property with a reverse mortgage is one of the top five myths about Reverse Mortgages. In order to debunk this myth, we need to address the value in a reverse mortgage for the homeowner.
Reverse Mortgages were launched in Canada in 1986 to provide Canadians in retirement an option to remain in their home and access equity to increase their cash flow and maintain their standard of living, to name a few reasons. one of those reasons is not for the lender to take the title of the homeowners’ property, that always remains in the homeowners’ name. So we can debunk the myth that the lender takes title of your property this is just not true.
There are some publications indicating a reverse mortgage is not a good mortgage product, what many people do not realize is a Reverse Mortgage is a niche product, it is not a one size fits all or a cookie cutter typical mortgage product. A Reverse Mortgage offer seniors a number of different options to access the equity in their home for their particular needs.
Whether you are refinancing your current property into a Reverse Mortgage or purchasing a new property with a reverse mortgage, the title is always in the homeowners’ name. Another myth we should probably address here is a reverse mortgage is a scam, this is not true either, Reverse Mortgages are provided by federally regulated Schedule A banks.
There are two lenders in Canada who offers reverse mortgages. HomEquity Bank also known as CHIP Reverse Mortgages was the first lender in Canada to offer Reverse Mortgages to seniors. They have 4 products under the Reverse Mortgage umbrella providing different solutions to seniors’ financing needs.
The most common mortgages are the traditional Reverse Mortgage providing clients with a lump sum payment from the equity of their home or they can access equity from their home with the Income Advantage Mortgage product topping up their income monthly which is a great way for seniors looking to increase their monthly cash flow.
A Reverse Mortgage can also be used for short term financing, for example, a Reverse Mortgage can be used to bridge finance the sale of one property to the purchase of another property, this is called an Open mortgage product, and would typically be paid out when your sale proceeds come through. It is important to keep in mind with any of these different reverse mortgage products the title always remains in the homeowners’ name.
Equitable bank is the 2nd lender that offers Reverse Mortgages to seniors. Their lending guidelines are slightly modified compared to HomEquity Bank, but they do offer the same bells and whistles that HomEquity Bank offers. With both lenders title remains in the homeowners’ name.
If you think a Reverse Mortgage might be a good fit for you and you are over the age of 55 and have equity in your property and looking for solutions to either increase your cash flow with tax free money, provide a family member with an early inheritance to possibly purchase a property for themselves, or maybe renovate your home to suit your needs as you age I strongly encourage you to continue gathering more information to educate yourself on the benefits of a Reverse Mortgage. The flexibility is here for you.
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.
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.
I am a Certified Reverse Mortgage Specialist and welcome the opportunity to work with you in finding the best mortgage financing solution for you. Please contact me below and I will provide you with Expert Advice to Guide You Home.
