Reverse Mortgages.docx (7)

May 30, 2018 | Publisher: askross554 | Category: Other |   | Views: 3 | Likes: 1

Reverse Mortgages 101 Once you have reached the minimum age of eligibility for a reverse mortgage, age 55, chances are that your assets are mostly divided between saved cash and the equity of the home that you own. This is the case for many senior Canadians, and there is nothing atypical about that. But when unexpected expenses arise and either you don't want to dip into your saved cash reserves or you can't for any reason, a reverse mortgage could be the solution that you're looking for. What is a Reverse Mortgage? In principle, reverse mortgages are pretty simple, almost like a second mortgage in Toronto . They allow you to get cash from the equity of your home if you meet a certain set of requirements. This is essentially a loan against the value of your home, with a cap of 55% of the home's overall value. The most appealing part of reverse mortgages is that you don't have to sell your home to qualify. The Benefits of Reverse Mortgages First, you get to choose how you will receive the money from your reverse mortgage. There are three options that you can utilize in receiving your loan: 1. In one large, lump sum. 2. In regular payments. 3. A combination of options 1 and 2. If you're struggling to pay a sudden, large expense, a lump sum payment could save you from the weight of unexpected bills. But if a regular income is what you need for your unique situation, payments issued over time can seriously pad your monthly bottom line and give you a bit of wiggle room with your routine expenses. The second-and perhaps biggest-benefit that we'd like to mention is that you don't have to sell your home when you get a reverse mortgage. You will also be under no obligation to make any payments on your reverse mortgage until you choose to move or sell the property. All of this keeps you in control of your finances, your mortgage and your life. Third, the income received from the equity of your home via a reversed mortgage is a tax-free source of income. Fourth and finally, the money you receive from this process does not weigh against any existing benefits or assistance that you currently receive. Qualifying for a Reverse Mortgage To be eligible for a reverse mortgage, you simply need to be a homeowner of at least 55 years of age or older. If you are married, both spouses must be 55 or older. Those are some pretty basic and easy requirements, but the qualification process can be a bit trickier. Numerous aspects of your life will be considered by the lender that's handling your reverse mortgage, including (but not limited to): The value and equity of your home Your age Current market interest rates The location in which you live If you are older and your home has more equity, you're likely to qualify for a larger loan. The younger you are and the less equity that your home has accrued, the lower the loan amount will be. Reverse mortgages are a great way to handle sudden expenses or get caught up when the financial burdens of life become a strain. They're also relatively low-risk for those who qualify, allowing them to breathe a sigh of relief as they know their needs are being met and they have the income that they sorely need. Ross Taylor & Associates 5050 Dufferin Street, Suite #213 North York ON M3H 5T5 (416)989-1000

×

Modal Header

Modal body