People have been asking about reverse mortgages. If you are looking at downsizing or rightsizing your home, this might be an option for you.
In Canada, reverse mortgages are offered by several financial institutions, including banks and mortgage companies. To be eligible for a reverse mortgage, you must be at least 55 years old and own a home that is your primary residence.
What Is A Reverse Mortgage:
It is a type of loan that allows homeowners who are at least 55 years of age or older to access the equity they have built up in their homes.
What’s Different About A Reverse Mortgage:
Unlike a traditional mortgage, where the borrower makes monthly payments to the lender to pay off the loan, with a reverse mortgage, the lender makes payments to the borrower.
With a reverse mortgage in Canada, you can receive a lump sum payment, regular monthly payments, or a line of credit that you can draw on as needed.
The amount of money you can receive depends on factors such as the value of your home, your age, and current interest rates.
What Are The Drawbacks:
Like in other countries, there are also potential drawbacks to consider when it comes to reverse mortgages in Canada.
These may include high fees, higher interest rates than traditional mortgages, and the impact on inheritance for heirs. It’s important to carefully consider the potential costs and benefits of a reverse mortgage before deciding whether it’s the right option for you.
Our next blog will discuss the pro’s and cons of a reverse mortgage.
As always, if you need help buying or selling your home do not hesitate to reach out to Gregg Bamford or Ryan Bamford.