For many Canadian seniors, residing at home is very important. However, because cash flow typically decreases as you age, affording day-to-day costs can be difficult. If you don’t want to sell your home, a reverse mortgage can be a great solution.
Canadian seniors of retirement age (55 and up) can access home equity funds by entering into a contract with a reverse mortgage lender like John Antle.
This mortgage product works in the opposite way of a regular mortgage. With a Reverse Mortgage, the lender advances you funding in exchange for a portion of your home equity. Therefore, over time the balance owing on the property will increase instead of decreasing.
There are advantages to consider when receiving this type of mortgage financing:
Disadvantages to consider are:
In order to be eligible for a Reverse Mortgage you must be a Canadian homeowner and be age 55 or older.
Unlike a home equity line of credit, where you decide how much you want and the repayment schedule, the minimum advance for a Reverse Mortgage is $25,000.
The funds are provided to you either as a one-time lump sum or can be paid over a predetermined amount of time.
The interest rate charged is higher than a regular residential mortgage. Ask your mortgage broker for an update on current reverse mortgage interest rates available.
For this type of mortgage financing, the property must be your primary residence. Normally this means you have lived in the home for at least six months.
There are two lenders in Canada that provide Reverse Mortgages: HomeEquity Bank and Equitable Bank.
Lenders will generally consider the following when approving a Reverse Mortgage:
Lenders will consider property value and equity position to qualify you for this mortgage. Your income is not an important consideration.
Yes, initial costs include, application fee, appraisal fee and lawyer charges.
Our team is devoted to helping you achieve your long term goals, and can offer you options that are not possible with traditional banking products.
We can help you with your first mortgage, help you pay down your mortgage faster, assist when renegotiating terms on an existing property, or help you develop rental income to make some headway on your amortization. Your Kelowna Mortgage Broker is happy to discuss all of your options! Call John Antle Mortgages in Kelowna today and let’s get started