Reverse Mortgages help Seniors and Retirees Stay in their Homes

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This is but one testimonial from the many thousands of people who have been able to remain in their home because they were able to obtain a reverse mortgage.  For many Canadians over the age of 55, a reverse mortgage could help provide them with a level of financial freedom which would allow them to enjoy life worry free.

Today, more and more seniors are carrying debt.  This debt has monthly debt servicing which can be onerous on those with a limited or fixed income.  Reverse mortgages provide an opportunity for those seniors to pay down this debt that involves monthly payments and turn it into reverse mortgage debt which does not require monthly payments.  Now their monthly income can be used for day to day use.

Or, renovations need to be done to a home or retrofitting needs to be done to keep the home user-friendly as medical needs change.  Reverse mortgages allow people over 55 use the equity in their home to make these renovations to allow them to remain in their home for as long as they like.

Additionally, it is a fact of life that as we age our medical needs tend to increase.  But, the cost associated with paying for these medical needs such as extra prescriptions, in-home care etc. can be overwhelming.  Again, a reverse mortgage may be the perfect solution.

There are no stipulations as to how you can use your reverse mortgage funds.  You may want to help a loved one through school or buy a major asset, invest to generate more income for yourself, or travel – the list is endless.  But for many seniors, simply being able to pay down debt and improve their home so they can remain in it for as long as they wish is all they are looking for.

I would be happy to explain this further to anyone looking for more information on reverse mortgages in Canada.

 

Reverse Mortgage Myth – The Bank owns my home

How to Qualify

Unfortunately, many Canadians make assumptions about reverse mortgages or they hear about it from a friend who themselves may not have as clear an understanding as they think.  Also, many Canadians assume Canadian reverse mortgages are the same as the products in the U.S., which are very different. The CHIP Reverse Mortgage is heavily regulated by governing bodies here in Canada and it is the only reverse mortgage product available.  Canadian borrowers can take comfort in this regulatory oversight.

 A longstanding myth is that a borrower with a reverse mortgage will end up owing more than the property is worth, giving the lender, HomEquity Bank, ownership of your home. This statement is false; in fact, HomEquity Bank has taken a number of measures to ensure the protection of your equity.

  • You retain title and ownership of your home

Just like with any other mortgage, your home is used to secure the loan which means that HomEquity Bank is registered as a standard charge on title. You, as the borrower DO NOT transfer ownership of your home. In fact, once it’s time to pay back the mortgage you or your heirs have the choice to repay the loan however you or they want. Selling the home is the most common option, but it is not mandatory.

  • Conservative lending

HomEquity Bank lends up to 55% of the value of the home depending on the age of the homeowner(s), property type and location of home. Homeowners 55+ are eligible for the product, but the younger you are, the less you will qualify for and the older you are, the more you will qualify for. This is simply a function of the fact that the younger you are, you are expected to have a long life ahead of you and the mortgage will not be repaid for a long time to come.  Given that no payments ever have to be made, in order to assure that the accrued debt does not get too burdensome, a conservative lending practice is followed.

  • Your home may appreciate in value

The total value of your home can appreciate in value, whereas the interest only accumulates on the actual  borrowed amount of the home (which is a smaller value). That is why over 99% of homeowners have money left over when their loan is repaid.

  • Negative equity guarantee

Often people assume that if your home equity depreciates in value at the time it is being sold, you or your heirs will end up owing more than the house is worth. This is simply not true. It is written into the mortgage terms that the borrowers will never pay more than the fair market value of the property at the time of sale.  Borrowers are required to keep their property taxes up to date, and maintain the condition of their home. If these conditions are met, you will never owe more than the fair market value of the home at the time it is sold.

The above measures ensure CHIP Reverse Mortgage customers will not be at risk of losing their home. In fact, a reverse mortgage can be a great solution that allows Canadian seniors to stay in their home for as long as they wish.

For more information or to find out how you can get a reverse mortgage please feel free to contact Joanne at 1-855-770-3225 or 819-639-8867 or joanne@mortgagesforseniors.ca.

 

Mortgage Financing as we Age

The world of mortgages is often confusing, as there are so many options, so many lenders and so many lending guidelines you must follow. And, that is just for conventional mortgage lending. So, it is not surprising that many people do not fully understand the mortgage financing options available to them as they age.

Generally, most people see their assets increase along with their income as they grow older. But then something happens. Retirement hits and what was once a given as far as successfully qualifying for a mortgage is no longer a sure bet. There may not be the income to qualify for what you are looking for. Or, perhaps for whatever circumstance, your credit has dropped. Navigating your options at this point requires a little further research and insight. And, that is where I hope to help. As a former lawyer, who left the practice of law to raise three wonderful children, who then returned to a new career of a mortgage brokering, I have spent the last decade specializing in mortgages for Canadian seniors.

Throughout this journey of writing about mortgage lending for seniors, I hope to share insights about the industry in general that will be beneficial to a wider audience. Commentary about such topics as your credit scores, mortgage qualification changes and the housing industry in general are things that I hope everyone of all ages can benefit from.

If at any time you have any questions about mortgage lending in Canada, please feel free to contact me at joanne@mortgagesforseniors.ca or 1-855-770-3225. I look forward to hearing from you.

Joanne Thomas