A Canada Reverse Mortgage is like any other mortgage except for two main exceptions: one, it is only available to seniors aged 55 years or older.
With a reverse mortgage you don’t need to make payments – ever. Although some like to pay the interest cost each year. Rates are low. You can put money aside each year if want to keep the mortgage balance the same if you want to – it is just so flexible that you just don’t have to. Once you get one – you will be really happy you did! Most own a reverse mortgage for 5, 10, or more years. And during that time you will never be required to make a monthly mortgage payment. Instead the balance slowly accrues over time … while at the same time the house value continues to rise over time. This process ensures equity in the home.
HOW WE HELP YOU – 2 testimonials:
SWAP A HIGH PAYMENT TO LOW PAYMENT (OR NO PAYMENT) MORTGAGE AND IMPROVE CASHFLOW FOR EASIER LIVING (testimonial):
“A single, hard working woman who was 61 1/2 years old with a home in a big city worth around $660,000 contacted us. She had a $60,000 mortgage with an aggressive contracted amortization imposed by her own Bank (meaning – very high monthly payments – to make it paid off by age 65), a small car loan and some small balances on credit cards. She was a nurse and was set to retire at 65 with a full pension, OAS & CPP, with a plan to have no mortgage and she planned to rent out the basement of her home after her son moved out. Currently there was no suite there. Her plan was going well, until she was diagnosed with MS. It moved very quickly and she had to go on permanent disability. Because her benefits were taxable, she was down to less than half of her previous income and couldn’t make the full mortgage payments. She went to her bank asking to have the mortgage turned into an interest only LOC or extend the amortization, but because of the lack of income, they could not qualify her. To help you out she was given a reverse mortgage for $110,000 to pay out the mortgage, car loan and credit cards, plus give her about $30,000 to build her basement suite and bridge the few years she had until her full retirement benefits started rolling in. He only other option would have been selling the home. The home is now worth over $1 million. Using income from the suite, she kept up – just making her interest payments each year – so her debt is still $110,000. So her house has risen in value and the reverse mortgage balance is the same. With a reverse mortgage you don’t have to make payments ever – but you can always pay towards the annual interest cost. A very valuable financial tool.”
A SENIOR CAN GET ILL ANYTIME THAT CAN CAUSE A HARDSHIP FOR BOTH THE SENIOR AND HER CHILDREN (testimonial):
“Sometimes we are asked as brokers to create income from reverse mortgage proceeds. One way is with an Income Advantage produce (that creates a better cash-flow solution). We greatly benefited not only a beautiful lady in her late 70’s with moderately advanced Alzheimer’s but also helped her lift a burden off of her children. Her short-term memory was about 30 minutes; long-term memory was perfect. She was still living in the home she had raised her daughters in. Doctors encouraged the family to keep her in the home versus moving to a care facility and totally disrupting her life. Her two daughters had taken long-term leaves of absence from work to care for mom because there were no investments left, and this was beginning to take a toll on their lives. Their credit union couldn’t qualify the mother for any mortgage or line of credit because of limited income (OAS & CPP only) but suggested the daughters (joint Power of attorney) ask about reverse mortgages. We can arrange for a ‘income advantage’ program that creates an income. We did. The children are receiving $ 6500 per month to pay for full-time in-home care; the home was appraised high enough that, even with a very low loan-to-value, this cash-flow will last 10 years before reaching the authorized limit (40% of the home value).” And in 10 years time, Gregory Stanley will request a new appraisal to see how much real estate values have risen (as they usually do over a 10 year period) and have the loan ‘reset’ to the higher home value; this may allow for more funds available to adjust for future planning needs. Once you use mortgage broker Gregory Stanley he will always be there to help you.
It is possible to get a bigger size loan though, past 40% and even up to 55% of your house value. That solution would consist of 2 mortgages, one behind the other, where the 1st mortgage is a reverse mortgage and the 2nd mortgage would be an home equity loan that Home n Work Mortgages Inc. would place. The reverse mortgage wouldn’t have any payments and the 2nd mortgage would. When is this solution used? Sometimes ‘more’ money is required to payout your existing Bank mortgage like RBC, CIBC, BMO or Scotiabank. The solution works whenever it can be shown that you will be better off – have more money in your pocket to live on each month.
In most cases you will be able to ‘mortgage swap’, that is ‘swap’ your current mortgage for a single reverse mortgage of the same loan amount. The concept of mortgage swapping was created by Certified Financial Planner and Mortgage Broker Gregory Stanley who is considered an expert for giving advice for retirees. His approach to retirement is to ensure that everyone has enough money to live on. That is solved, he says, by (1) reducing debt repayments (mortgages, car loans) by eliminating them and (2) improving returns on their investments, or a combination of both. He works with a network of financial planners across Canada ‘helping seniors’ with his talks and advice.
Now back to reverser mortgages. With one ‘time’ is a factor as there is an age eligibility criteria of being age 55 years or older. Even at 55 it is possible that a Canada reverse mortgage may be around for 30 years! Just imagine, some lender has agreed to lend you money, without any expectation of an ongoing monthly repayment, and they may not get paid back their monies lent for 20 or 30 years. And the loan is not based on your health nor your income or even your credit rating. It is a home equity lending program that is designed only those age 55 or older and gives them the ability to borrow based on equity only (not income or credit which is a huge benefit). If they are the right age and the house is an ‘average home on an average street’ then you will get a Canada reverse mortgage. Get your FREE QUOTE to see how much you will get.
In the meantime you get in to enjoy that money and use it any way you wish. So here are some main features of a Canada Reverse Mortgage:
You and your spouse must both be at least 55 years old or older. This age qualification is in stone and cannot be changed.
The amount of loan that you get varies depending on your age, the house value and the location of your home. If it is in a well populated area you will get more; in a more rural setting you will get less. If you have an average house on an average street and you are in your 60’s then you will be allowed 30% of your current house appraisal as a Canada reverse mortgage. Same property with someone 70 or older will get 40%. The minimum loan advance is $20,000 (twenty thousand) at a time. The maximum loan is 1/2 million dollars.
We can determine the exact amount that you would be eligible for once we get an independent appraisal of your property. And if you should wish to proceed any costs associated in obtaining the reverse mortgage can come out of the mortgage proceeds at funding. You do not have to pay any costs that can range between $1200 to $1800 depending on where you live in Canada up front; again, it is funded when the reverse mortgage proceeds are advanced.
You can get pre-approved for the maximum amount now; but only take a minimum of $25,000 now. Then, later all you have to do is call the lender for more money at any time. You only pay for the amount you take … not the amount that you get approved for.
All money that you receive for a reverse mortgage Canada loan is tax-free. Also, any proceeds does NOT effect 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. This is such a big deal I am going to mention it again. With any other mortgage product you would have to make monthly payment. With a reverse mortgage you do not have to make any mortgage payments. This allows a senior to create more income by either purchasing an income with an insured annuity or a securities product. This can also occur by paying off other debt obligations and the money ‘saved’ by not making payments can be used to live and enjoy life better.
You still get to keep the house in your name; you are still on title (just like you would with any other mortgage). And when you move or sell the home then the debt is repaid. You even have the option to ‘transfer’ your reverse Canada mortgage to a new property. Contact us for more details.
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. In fact, on average over 50% of the house value is still equity by the time that the reverse mortgage is repaid. So the kids will be just fine. And there are other ways to keep the home for the kids at the time when the reverse mortgage needs to be repaid (when both parents are deceased for example). The children can simply obtain a normal mortgage to pay out the reverse mortgage at that time. Remember there will be equity in the home.
Your estate is well protected. The lender guarantees that your heirs will never owe more that the loan value.
Save on Taxes! You can use a reverse mortgage to take cash out of the home and put it into investments. All the interest charged on the loan is tax deductible.
Here are some things to consider if you are eligible (55 years or older) to obtain a Canadian Reverse Mortgage:
You only get to borrow a percentage of your house’s value to a maximum limit of 40%. And you only get 40% if you are ‘older’ … in your 70’s or more. Most other seniors are eligible to borrow up to 30% only. Unless you need more, and then Gregory Stanley can add on an home equity loan for you.
This means that your house value can still rise and you still have a large portion of your home ‘untouched’. Your house may continue to grow as houses continue to do over time so that in the distant future your house will have allot of equity remaining.
The house title always remains in your name. You always remain on title.
The lender guarantees that your mortgage loan balance will never exceed your home market value as far as repayment of the mortgage is concerned. This exists ‘even if’ house values ‘never ever’ rise over time.
No one makes you move or sell your house. You live there (or your surviving spouse does) as long as you wish. No monthly repayments are required. Ever.
If you sell your house and buy another one there is an option to transfer part or all of your Canada reverse mortgage over to the next home. If the new home is the same value or more then you just move the entire balance over to the new home. If it is less, then you use part of the sale proceeds to ‘pay down’ your reverse mortgage balance and transfer the rest to the new home. It is really that simple.
You can get pre-approved for a maximum loan amount and only take the minimum of $20,000! But, with only a phone call you can access the rest of your pre-set loan amount any time you wish. For some it might be once a year … each year, for ten years or more. You only pay interest on the money you actually take.
Gregory Stanley CFP CSEC (both a Certified Financial Planner and mortgage broker in Canada who tours the Country giving educational seminars (www.pro-seminars.com) to audiences completely comprised of Financial Advisors and he teaches them on how to use a mortgage broker to ‘unlock’ the home equity in homes to create additional cash flow for clients. Here are a few things that the audiences truly appreciate:
If you currently owe a mortgage a Canada Reverse mortgage can pay it off. And you can continue to live, stay and enjoy your home and not be bothered to make any more monthly mortgage repayments. Think of the standard of living that is improved. You have more net income to live on because you have less bills to pay monthly.
If you are on a fixed income and could use some extra cash or income the proceeds from a Canada Reverse Mortgage can do that!
By unlocking some value from your house you can pay off other higher interest rate debts or debts that ‘drain’ cash flow i.e.. a car loan. Pay off all your bills at once. Again, no monthly repayments to worry about.
You can make a payment if you wish to do so! Each year end, right after holidays, many seniors will pay down ‘something’ on their mortgage. They aren’t obligated to … but many do so anyway. This way your loan balance is kept at a minimum. More equity to pass on.
You can quit your reverse mortgage Canada loan anytime you wish. There is no charge to do so if you have owned your reverse mortgage for 3 or more years.
You are always in control of the mortgage. Can choose to stay or leave. Can choose to enjoy maximum access or not bother to access all the available cash to him.
It is a major way to fund home nursing care and other medical expenses in Canada. In fact, thousands will use the proceeds from reverse mortgages to ‘top up’ or improve their existing financial or estate plans with their current advisors. One of the biggest top ups is for paying for critical illness benefits. When you get sick, and most of us do, it is nice to know that funds will be available to pay for ‘non MSP’ eligible drugs and other procedures a normal person would never be able to afford. And if you don’t get sick? You can have it so all premiums are returned! It is a called a ‘return of premium’ option that you can ask your own insurance agent/advisor about.
If you fill in the reply form then you will be able to obtain expert advice. You can speak directly to Gregory Stanley by calling him now. He is very friendly to speak to and he would love to make sure that you are making the best decision for you. If a reverse mortgage is not right for you – he will tell you – as a broker he can just tell you what would be your best decision. His motto is: My first interest is in your best interest’.