Reverse Mortgage Canada-The Top 4 Myths Some good things are worth the wait! As an official “senior citizen,” you’re not only eligible for a discounted rate on public transit & movie tickets, but you also may be eligible for a Reverse Mortgage Canada. Perfect timing when you might find that your available finances are just not what they used to be, especially in today’s current economy.
Thanks to CHIP (Canadian Home Income Plan), “Reverse Mortgages” were put in place over 25 years ago to help homeowners (age 55+) borrow against the equity in their homes without having to sell the home, take on monthly mortgage payments, or give up title on the home.
When you put a Reverse mortgage in place in Canada, you have the choice, to no longer make regular mortgage payments to your lender – you can, of course, choose to make payments (monthly, semi-annually, yearly), but you are under no obligation to do so until you sell your home, or until the last home owner passes away. You are charged interest only on the proceeds you receive.
Yep … sometimes a Reverse mortgage sounds too good to be true.
The amount of funding you receive is done on a case-by-case basis depending on your age (must be 55+ years old) and your appraised home value, but a Canadian Reverse Mortgage is far from being a complicated science!
Sadly, there are a number of false concepts and ideas about Reverse Mortgages out there. We’ll address what we consider to be “The Top 4 Myths of Reverse Mortgages in Canada” here, below, but you’re also welcome to call us any time (toll-free) to discuss your most pressing questions at (866) 223-1794.
So, let’s quickly debunk a few of the big “myths” about Reverse mortgages for Canadians:
Reverse Mortgage Canada MYTH #1:
You can only qualify for a Reverse Mortgage with a higher level of income or credit.
A Reverse Mortgage has no income or credit requirements. (Other “mythizers” will tell you that you must be in good health – balderdash! What a ridiculous myth.)
The amount of funds you are eligible for with your reverse mortgage are solely dependent on your age, the location of your home (or condo or townhouse), and the amount of equity that you have in your home.
Reverse Mortgage Canada MYTH #2:
Your home must be debt free in order to qualify for a Reverse mortgage in Canada.
You can qualify for a reverse mortgage even if you still owe money on your existing home’s mortgage. Keep in mind that when you do invest in a reverse mortgage, your existing debt must be paid off first. This is normally done with your new, reverse mortgage or, if you prefer, from your savings or assistance from family or friends.
Reverse Mortgage Canada MYTH #3:
The mortgage lender behind your Reverse Mortgage will own your home.
A CHIP reverse mortgage does not give up ownership of your home. Just like a traditional mortgage, a reverse mortgage is registered on title, but your home always remains in your name. And, just as a traditional mortgage, the lender’s only “interest” lies in the outstanding loan balance.
Reverse Mortgage Canada MYTH #4:
Your heirs will be stuck with your Reverse Mortgage loan after you pass away.
The CHIP Reverse Mortgage only has to be repaid when your home is sold, either by yourself, or your estate. The estate can choose to repay the loan from the proceeds of the sale of the property, or to place a new mortgage on the property. After the loan is repaid, all of the remaining equity goes to your estate or heirs.
Again, you’re welcome to discuss these myths (and more if you’ve heard them!) by calling me any time. My direct line is toll-free (866) 223-1794. Any call you have with me is, of course, under no-obligation and is absolutely free.
Or, simply peruse our Frequently Asked Questions for more information on reverse mortgages
@Darlene Vilas, Canada’s leading Reverse Mortgage Specialist,www.ReverseMortgageAdvantage.ca