Reverse Mortgage
What is a reverse mortgage?
A reverse mortgage refers to a type of mortgage where retired adults at or over age 55 have access to their home equity without having to sell the property. Reverse mortgage enables you to skip the monthly payments and pay the entire mortgage loan back at the time you decide to sell your property.
How Does a Reverse Mortgage Work?
If you are over the age of 55 and need access to cash, better yet tax-free cash then Reverse mortgage is the right choice for you. One of the advantages of a reverse mortgage is that you will not have monthly payments on the mortgage loan. You are only required to pay the mortgage back once you sell your house you maintain ownership of your house.
Another advantage is that you can ask for up to 55% of your home value as a loan in tax-free cash. All you need to do is maintain your property and pay the property taxes and insurance. In the event that your home goes up in value, the appreciation is yours and yours to keep. It is worth mentioning that the money you borrow does not impact your old age security payment or guaranteed income supplement (GIS).
Reverse Mortgage Eligibility and Qualifications
Here is a list of factors that can impact your eligibility:
- Are you a Canadian homeowner?
- Are you and your spouse at or over 55 years of age?
- What type of residential property do you own?
- What is the current value of your home?
- How does your property perform in terms of condition and location?
- How much equity is in your current home
Do I remain the owner of my house after getting a reverse mortgage?
With a reverse mortgage you will continue to hold ownership of your home, and will never be forced to sell your house. You are only required to pay the loan back if you choose to sell the house.
As long as you keep up with your property taxes and maintain your home, you have nothing but cash to put toward whatever your heart desires. The best part is that with reverse mortgage your cash is tax-free.
I, Es Ghassemi, can assist you with obtaining a reverse mortgage in an easy and hassle free way.
Frequently asked questions
Will a reverse mortgage affect my ownership of my house?
No! No! Your house will always be solely your property! You keep full ownership of your property after completing a reverse mortgage, and we'll never make you leave during your loan term.
What can I do with the money from a reverse mortgage?
The money from a reverse mortgage is yours to do with as you like. Reverse mortgages are often used to pay off debt, cover medical bills, renovate homes, augment income, cover living costs, and fund vacation. The profits of the reverse mortgage must be utilized to pay off any existing mortgages or loans secured by your house before you may spend the leftover money as you like.
How can I receive proceeds from a Reverse Mortgage?
Getting the profits of your mortgage as a one-time lump sum payment or receiving periodic installments over time to boost your retirement income are two funding possibilities for your reverse mortgage. These payment options may also be used in combination to get some of the money upfront at closing and the remainder in a series of installments.
What costs are involved with a reverse mortgage?
A reverse mortgage often involves paying the following small fees in addition to the interest on the borrowed funds:
- Appraisal Fee: paid to an third party property appraiser
- Legal Advice: Payment for independent legal counsel is made to the attorney or notary of your choosing.
- Lender fee: fee collected by the lender, financed through the proceeds of the Reverse Mortgage
What if the value of my house is lower or higher than the balance due on my reverse mortgage?
If the value of your home declines and the mortgage balance owed exceeds the sale price, the lender will pay the difference between the sale price and the mortgage balance as long as you have complied with all of your obligations under the mortgage, such as paying your property taxes, keeping your home in good repair, and getting home insurance.
Will my heirs be liable for paying back the reverse mortgage after I die?
The Reverse Mortgage will be repaid by the borrower(s)' heirs after their death. Normally, the heirs would decide to sell the house in order to pay off the reverse mortgage.
Can a condo or apartment get a reverse mortgage?
Several different kinds of residences, including condominiums, townhouses, and semi-detached houses, are eligible for a reverse mortgage.
What paperwork is needed to apply for a reverse mortgage?
You will need to compile and provide the following documents if you are authorized for a reverse mortgage. Keep in mind that every person's situation is unique, therefore this is not meant to be an exhaustive list.
- 2 forms of identification
- Verification that the property is your principal address
- Signed application
- Required legal documents
- Property Insurance information
- Statement(s) on any existing mortgage (if applicable)
- Proof that property taxes are up to date
