Reverse Mortgage Lenders, Canada

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Although reverse mortgages might seem controversial, they’re becoming more and more popular in Canada, providing older Canadians with greater financial security. They’re different than traditional mortgages in several ways, and as everything new and different, they arouse suspicion. Let’s take a closer look at them!

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What is a reverse mortgage?

A reverse mortgage is a home loan that allows homeowners to convert part of the equity of their home into cash. When you take a traditional mortgage, you have to pay payments on a monthly basis that reduce your debt and build up equity. While traditional mortgages are usually used to buy or refinance your home, reverse mortgages help older people to remain in their homes. Through this mortgage, the homeowners obtain cash — the lender pays the consumer. It’s becoming a favourite choice of many seniors in Canada, the US, the UK, and India.

How it works

The eligibility criteria don’t include credit scores or income in the qualification process because almost all older Canadian homeowners have an amount of equity in their home. Homeowners aged 60 years and over can qualify for this mortgage. The loan amount depends upon the age of the youngest borrower, the appraised value of the home, the equity built up in the home, the chosen loan program, and the way in which you’d like to receive the loan funds. The lender can provide you a single payment or monthly payments. Another option is to apply for a line of credit that allows the homeowner to withdraw the required cash when needed. These different types can be combined as well.

Canada Reverse Mortgage is Canada’s number one choice for information and customer service. They provide free information, and their licensed mortgage brokers access dozens of mortgage lenders across Canada.

Benefits

If you have debt or need money to fix up your home, for healthcare costs, for a vacation, or to help your children, reverse mortgages are worth considering. Here are the main advantages of taking a reverse mortgage:

  1. Homeowners don’t have to pay anything. They receive money.
  2. The borrower can use money for anything.
  3. Homeowners don’t have to to pay any tax on the revenue received on this mortgage.
  4. Seniors can’t lose their homes. They have a right to stay in their homes until they sell them or pass away.
  5. Reverse mortgages help homeowners to stay in their homes and pay off debts and all the bills that they can find difficult to cover.

Back-up plan: reverse mortgages can help folks afford retirement, but are they a good offering for insurers with banks?(Life: Reverse Mortgages)(Statistical table): An article from: Best's Review
Book (A.M. Best Company, Inc.)

3 to 5 year minimum

2009-01-31 11:30:30 by RM_Guy

If you are considering a reverse mortgage, plan on staying in the home for at least 3 to 5 years. I do not advise a shorter time period. The longer you have a reverse mortgage the less expensive the closing costs become. This is because you spread the costs over a greater number of years, thus lowering the annual costs.
In this respect they are similar to a "forward" mortgage. You would not get a 30 year forward mortgage if you knew you were leaving the home in 2 years, too expensive.
There are no "points" in a reverse mortgage. HUD does not allow such deception in reverse mortgages

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Home equity provides cash flow option  — Maple Ridge News
It is a bit of a conundrum, says Chris Hoeppner, from HomEquity Bank, the company behind Canada's only reverse mortgage program for the past 27 years.

In my opinion: Let equity loans take the strain  — Mortgage Strategy
In some territories such as the US, Spain and Ireland, sharp declines in house values and steep increases in defaults on mortgages created serious problems for banks and other mortgage lenders which then created a knock-on effect across the whole ..

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  • Avatar Mary Ann How safe are reverse mortgages and why wont first lenders help?
    Nov 07, 2011 by Mary Ann | Posted in Renting & Real Estate

    We ran into real problems 3 years in and cant get help. Why doesnt our equity mean anything to lenders? Are the reverse mortgages a safe way to go?

    • In every reverse mortgage I have seen- the owners borrow what they can out of their house for whatever purpose (maybe just to live on) and then they get to live there the whole rest of their lives without a mortgage payment. They do have to keep the place repaired and keep HOA, property taxes and insurance paid. If they move out- they have to either pay the loan back (by selling or whatever) or allow the home to get foreclosed. In the US they are non recourse loans so they can not go after you for any shortage (the foreclosure will not effect your estate). Every single person I have ever known …