April 15 2020
The use of funds are up to you! You can use them to cover daily expenses, renovations, medication, family needs, trips, in-home care, or to help a family member with their down payment (while you still get to keep your home).
Homewise acts as a mortgage Advisor for clients to provide advice on if a reverse mortgage is right for our clients and from which lender. We work with multiple lenders, which include Equitable Bank and CHIP through Home Equity Bank. Our goal is to help clients determine which lender provides them the best option for their unique needs.
The bank will not own your home. You keep ownership.
If you meet your mortgage obligations, you will not owe more than the fair market value of your home on the due date.
You can take out funds when needed, you do not need to take a big lump sum at one time if you do not want to. This will reduce the interest that accumulates. You can also take the option of paying down interest monthly, without any prepayment charge.
At any point of the mortgage, the amount of equity of your home that you still own will be the difference between the amount owed on the reverse mortgage and the current value of the home.
As Canadian reverse mortgages do not have any required payments until the mortgage is due, the rates are often slightly higher.
If you meet the guidelines and terms of your reverse mortgage, you should have no issues with losing your home to the lender.
Any mortgage must be paid off in order to get a reverse mortgage. That said, you can use the funds from an initial advance of funds to pay off an existing mortgage (or even a lien) that is against the property.
No. As long as both spouses are registered as joint tenants on the property, you will be entitled to the benefits of your reverse mortgage.
There are multiple options for how you can receive funds You can get an upfront one-time advance of the full mortgage. You can also take smaller amounts (minimum of $25,000) in recurring or single fundings.
You are still responsible for all fees associated with your home.
Yes, for all applicants included, a credit report will be needed.
A power of attorney can apply for a reverse mortgage if necessary and is for a legitimate reason.
There is a fee to setup your reverse mortgage that is charged by the lender. It is generally between $1,000-1,800. You will also need to be prepared to pay for Independent legal advice and an appraisal fee.
We have lenders that ensure you remain the owner of the home at the end of the mortgage, as long as you have paid property taxes, insurance and maintain your property. As a borrower, you will never owe more than the value of your home. You mortgage will only become due if you move out of your home, sell your home or pass away.
The appreciate of your home goes back to you. The only interest you pay is based on the amount you borrow
The heirs will be the ones that are responsible for the repayment of the reverse mortgage. What often happens is that they would make the choice to either sell the property to pay off the reverse mortgage or pay it down themselves. Also, when you (and your co borrower if you have one) pass away, your heirs will only the loan and requisite interest on the amount of reverse mortgage that had been received at that time.
Because a reverse mortgage is tax-free, there will be no affect on pension benefits as well as Medicare. For this reason, a reverse mortgage is a good addition to have if RSP and Pension is not enough to support your lifestyle after retirement.
There are many qualification standards that come into consideration by our lender partners when determining how much they will lend. The key factors are your age (over 55 years old) and the older someone is the more they will generally qualify for. The next important factors are location and appraised value of the home. Your Homewise Mortgage Advisor will be able to discuss this with your further.
The documents needed after approval will vary, but in general here is a full list of what may be asked for:
When qualifying for a reverse mortgage, you will have an appraisal. The appraisal will need to set a value of least $150,000 to qualify.
Visit our reverse mortgage page and sign up to speak with one of our Homewise Advisors to get unbiased advice and information.Click here to sign up now.
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