Confused about reverse mortgages? You’re not alone! Today I’m explaining what you need to know about reverse mortgages so that you can better understand the advantages and disadvantages of applying for one. As a CHIP Certified Reverse Mortgage Specialist I’m uniquely qualified to educate homeowners on reverse mortgages, and I welcome any questions you may have.
A reverse mortgage is a loan secured against the value of your home. Unlike a loan or a regular mortgage, with CHIP you are not required to make payments. You only repay the loan when you move or sell your home.
Here is exactly what you need to know about reverse mortgages:
1. Age matters
You must be the age of 50 or older to be a qualified applicant.
2. This offer is exclusive to Home Equity Bank
Home Equity Bank is the only financial institution in Canada that offers this product
3. Seek legal advice first
Independent legal Advice is required as part of the application conditions
4. Use age as your advantage
The older the applicant, the larger the loan-to-value permitted
5. Unique opportunity
A reverse mortgage is an ideal lending product for an Applicant who may not meet the debt-servicing qualifications of a traditional mortgage application.
There are many advantages to reverse mortgages, but the biggest selling point is the fact that there are no monthly payments. As mentioned before, you only repay the loan when you decide to move or sell your home. Another benefit is the fact that property value increases in most Canadian provinces are higher than the annual percentage rate of this product. Many people also seek out a reverse mortgage as a way to deal with debt-consolidation – which is a great way to utilize this option.
Of course, there are some disadvantages to reverse mortgages – and also some factors that make attaining a reverse mortgage difficult for some. To start with, all individuals on the titles of the subject property must meet the required age. For example, both husband and wife would have to be over the age of 50 to quality for a reverse mortgage. In addition to this age restriction, in most cases the home equity must also be greater than 50% to borrow.