May 12, 2023 nkad3

Reverse Mortgages Canada – 2023

How do you know if a Reverse Mortgage is the right solution for you in 2023?

Reverse mortgages in Canada are a misunderstood mortgage solution that exists in the market. Many people are set to believe that a reverse mortgage is a scheme to take your home away from you, but that couldn’t be further from the truth. Institutions offering reverse mortgages are reputable and heavily regulated by government authorities (OSFI), and the government would have stepped in long ago if it were a scheme! If there is any duty our society has, it is to protect our young, and our elders. It is often those who aren’t educated on reverse mortgages that are quick to make inaccurate statements about products available.

Reverse mortgages are catered for homeowners at the age of 55 and older, who have either paid off their home in full or have a relatively low outstanding mortgage balance relative to the market value of their home. Although the balance of the mortgage grows over time, it’s only because mortgage payments are voluntary by the homeowner. The bank will not require you to make monthly installments, and whatever interest accrues will just be added to your outstanding mortgage balance. However, if you choose to make monthly installments, the same will not occur and you can indeed pay down the principal just like you would with a traditional mortgage. You can imagine how much financial burden this relieves are aging population from!

The obvious benefit of not making a payment is that you are effectively increasing your monthly cash flow (tax-free) so that you can finance other aspects of your lifestyle, whatever that might be. In a way, a reverse mortgage is no different than a traditional mortgage refinance. If you were to refinance your home with a traditional mortgage, you would have used up a portion of your equity too, and are also now required to make regular payments to it. Similarly, if you were on a fixed income and sold your home to maximize your cash out, you are effectively tapping into the proceeds from the sale but had to sell your home in order to do so. A reverse mortgage in Canada prevents that from happening.

With a reverse mortgage, the bank will NOT take your home from you. You get to continue to live in your home, and a reverse mortgage is paid out when you decide to sell your home or if you eventually pass. For most homeowners, especially those that have lived in their homes for many years, the last thing they want to do is to leave. Homes tend to anchor important memories that have been established over time in the hearts of homeowners and their loved ones. To most people, this is a priceless quality that they want to continue to hold on to and cherish.

At (905) 455-5005, we encourage you to give us a call to discuss any questions you may have or to simply learn more about Reverse Mortgages in Canada and their benefits. It’s a great solution for homeowners in 2023 who want to enjoy their retirement years and their homes without any stress or worry about losing them (Especially post pandemic where things are slowly, but surely, returning to normalcy).

 

 

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