What is a Reverse Mortgage
A Reverse Mortgage in Canada is a type of loan where individuals 55 years of age or older can access the equity in their home and never pay any monthly mortgage payments. As one of the leading approved reverse mortgage brokers, Dominion Lending Centres can help you access up to 50% of the equity in your home. These funds are tax-free and payment free. We assist you on how to meet your short or long-term financial goals. As well as help you to plan a secure and successful retirement. Our specialists will guide you step-by-step through this mortgage process.
How does the reverse mortgage in Canada work?
By using a reverse mortgage in Canada, the particular homeowner continues to own their home and receive cash in their own preferred way. You can receive a lump sum amount or in monthly amounts, like a paycheque or pension. With the increase of the reverse mortgage, the value of your home will also increase. The average growth in property value over the past 15 years is 7.5%. Say your property is $1 million in value, that means your value increases each year by $75,000.00, the reverse mortgage on your home is $500,000.00 at 5%. Each year your interest accumulated is $25,000.00. This means over the year, you made no mortgage payments and your net worth still grew by $50,000.00.
The Most Attractive Feature with a Reverse Mortgage
The most attractive feature of a reverse mortgage in Canada is that a senior may carry a reverse mortgage for 5, 10, 15 or even 25 years or more and never be required to make a monthly mortgage payment. Historically, house prices tend to increase. And all funds received are TAX-FREE!
Your loan balance will not exceed the fair market value of your home.
With a reverse mortgage in Canada, the balance of the loan slowly accrues over time... while at the same time the home's value continues to rise. This process ensures equity in the home over the long term. Regardless of market fluctuations, the Canada Reverse Mortgage lender guarantees, that the loan balance will not exceed the fair market value of the home. In other words, you can never owe the lender more than the value of the home.
There is a lot of misinformation out there on the internet. Largely because people do an internet search for “reverse mortgage” or “mortgages for seniors”. They fail to add the word CANADA or CANADIAN. Our financial system here in Canada and banking regulations are very different than those in other countries! When doing your research, be sure you are reading about the Canadian experience. All mortgages for seniors are protected by our Canadian laws, they are regulated by the Canadian Federal Government. For instance, you will remain on the title to your home, and you can never owe more than the value of the home. As long as you are still living in your home, you can never be forced to move or sell. These protections are guaranteed in writing.
No need to shop around for the best reverse mortgage
Dominion Lending Centres will negotiate your rate for you. Rates are slightly higher than conventional mortgages, as the reverse mortgage lender is offering to lend money and not receive payment for an unpredictable period of time.
With a complete suite of services including our professional expertise, mortgage management, procurement and integration of loan services. We help our clients to enhance their lifestyle, increase monthly cash flow and get them back to enjoying the more important things in life. Take your retirement to the next level with a reverse mortgage. Give us a call for a free consultation.
Your Reverse mortgage solution may be much easier than you think. Just give us a call to experience the difference.
Reverse Mortgage Facts and FAQs
- You and your spouse (if you are married) must both be at least 55 years old or older.
- The amount of loan that you get varies depending on your age, the house value and the location of your home.
- Eligible amounts are determined through an independent appraisal of the property.
- You can get pre-approved for the maximum amount initially, and only have a small amount advanced. If you require more funds at a later date, simply call to receive those funds. You only pay interest on the amount that is loaned to you ... not the amount that you get approved for.
The money you receive from a reverse mortgage is tax-free
- All the money that you receive for a Canadian Reverse Mortgage is tax-free.
- Canadian reverse mortgages do NOT affect any Old Age Security or Guaranteed Income Supplement government benefits you may already be receiving.
- You make absolutely NO monthly repayments while you or your spouse live in your home.
- The title is still in your name; you are still on the title (just like you would with any other mortgage).
- You keep all the equity that is left in your home. 99% of all homeowners have equity in their home when the reverse mortgage loan is repaid.
- The estate is well protected.
- Save on Taxes! You can use a Reverse Mortgage in Canada to take cash out of the home and put it into investments. All the interest charged on the loan is then tax-deductible.