As we near retirement age, we often wonder how we’ll be able to live comfortably without having to sell our homes. There is a special type of mortgage that will allow you to remain in your home and reap the benefits of its value.
A reverse mortgage is a financial package that is designed to either supplement your retirement fund or provide you with adequate funds to live comfortably in your golden years.
Reverse mortgages are named as such because it allows you to borrow against the value of your home without having to sell it or repay it on a monthly basis. Unlike a traditional mortgage, this product is only available for Canadian homeowners who are 55 and older. Reverse mortgages allow you to create extra income by transferring part of your home’s value into money you can actually use.
Because of the reversed nature of this mortgage it works quite easily:
One of the major benefits of a reverse mortgage is that you don’t have to make regular payments on your loan. Moreover, the money you borrow is tax-free and can be used as your primary source of income.
You can receive your funds in one lump-sum payment or you can have advances set up on a schedule so you can collect it in the same way you’d collect a paycheque. You can even combine the two options and receive your money however you prefer. Finally, your reverse mortgage funds do not affect any benefits you may be receiving such as OAS or GIS.
To qualify for a reverse mortgage, you or your partner or spouse must be 55+. There are no monthly payments involved with a reverse mortgage, which means there are no income/debt requirements to obtain one. Credit checks are usually unnecessary, and unlike other seniors programs, you do not have to undergo a medical physical to qualify.
If you or your spouse are 55 years old or older and you’re interested in a reversed mortgage, apply now. You may be heading into your retirement, but that doesn’t mean you can’t be financially stable.Back
Your home is your most valuable asset. It is probably the single largest investment you will make in your lifetime. Your home is more than a place to rest your head and raise a family. Your home contains equity. It is a treasured resource and in some cases, can even be used as an ATM (aka cash back mortgages and HELOCs – don’t worry we’ll get there).
Everyone who is looking to purchase a home will need a mortgage. But, what is a mortgage exactly and why do you need it? Besides being the term to describe a loan secured by real estate, a mortgage allows you to access funding to procure your dream home.
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