There’s a lack of information around reverse mortgages, and as more seniors look to this type of financing to help their adult children as well as finance their retirement – it’s time to set the record straight on some misconceptions.
That’s according to HomEquity Bank, a Schedule 1 Canadian Bank offering the CHIP reverse mortgage.
Here, below, are the bank’s ‘Top 10 Facts That Will Make You Change Your Mind on Reverse Mortgages‘ :
- Once you are approved for a reverse mortgage, you are approved for life.
- You can qualify for a reverse mortgage regardless of your credit rating or income level.
- You will still have equity left in your home. Even after arranging a reverse mortgage, in most cases, HomEquity Bank clients have an average of 50% of the equity left in their homes.
- You can’t sign final documents without first receiving Independent Legal Advice. That means all Canadian seniors must receive independent counsel before a reverse mortgage can be arranged.
- Arranging a reverse mortgage is not complicated. Some seniors have described arranging a CHIP reverse mortgage as ‘the simplest financial transaction ever arranged.’
- Reverse mortgages can be set up with a Power of Attorney
- Money is of course tax free, and can help you lower your overall tax liability.
- If one spouse dies, there are no changes to the terms of the reverse mortgage. The loan does not have to be repaid and you don’t have to requalify.
- Reverse mortgages provide you with an opportunity to diversify your retirement portfolio. You can take out money as a lump sum, or as regular income, or a combination of the two.
- We have different rules in Canada when it comes to reverse mortgages, so don’t look to U.S. sources for information.
“More Canadian seniors are looking to a reverse mortgage as a way to supplement their retirement income. For many, it helps them to remain in their homes as they age,” explains HomEquity Bank VP National Sales, Jeff Spencer.
“When it comes to finances, we want to educate Canadians on their options, and clear up misconceptions around the reverse mortgage,” he adds.
How the CHIP reverse mortgage works:
Use the CHIP Calculator to determine the amount of money available, which is based on the homeowners’ age and the location and type of home as well as the home’s current appraised value.
Access money as a one-time lump sum, as monthly payments or both – it’s tailored to individual needs.
Up to 55% of the home’s value can be accessed and the money is tax free. Unlike a traditional loan, no payments are necessary until it’s time to move or sell the home.
To find out if a reverse mortgage makes sense for you or someone you love, please call Ross at 416.989.1050 or email [email protected]
One of Toronto/GTA's Most Trusted and Knowledgable Mortgage Agents
Ross Taylor is recognized by his peers as one of Canada's pre-eminent difficult mortgage specialists. His ASKROSS blog and column in Canadian Mortgage Trends are focused on the intersection between mortgage financing and personal credit.
With unique dual certification as a licensed credit counselor and mortgage agent, Ross's insights are valued by mortgage professionals and homebuyers alike.
If you have questions about anything financial or mortgage-related, please contact [email protected]. Ross answers everyone personally.
For more information, visit About Ross Taylor.