All You Need To Know About Reverse Mortgages
Seniors on a pension or fixed income have a very hard time qualifying for a traditional mortgage or line of credit. A Reverse Mortgage is an equity-based lending program that allows seniors over the age of fifty-five to access their equity without the burden of monthly payments that would normally be required on a traditional mortgage or line of credit. This financing solution lets retirees tap their homes for whatever cash they need in their later years.
As an expert in this field, Rowan Smith Mortgage Broker - City Wide Mortgage Services wants to share with you vital information on how a reverse mortgage can be a special financial tool enabling you to remain in your home, live there, and get the money you need for your future plans. Keep reading to know more.
What is a Reverse Mortgage?
A Reverse Mortgage is a loan that allows you to unlock up to 55% of the current value of your home without selling. You can utilize these funds (tax-free) however you wish. The amount of equity that is accessible is a function of property location, age of the borrower, and property type (Single Family versus condo, etc.).
What’s more is that a Reverse Mortgage can be particularly useful for older homeowners who have a large amount of equity in their home but are finding their income limited, such as their pension or retirement funds.
Important aspects to keep in mind
There are no payments required, ever, for the life of the borrower! When taking on a Reverse Mortgage, the lender cannot ever force the sale of the home. Even if one spouse passes away, the other can remain in the house for the rest of their life or until they move into assisted living. There is no requirement for income proof.
And lastly, you can take the money in a lump sum or as monthly payments to boost your income in retirement. What you only need to do is pay interest on the funds in advance.
But before applying for a reverse mortgage, it is imperative that you do your research. You need to find answers to questions such as, How do I qualify? How can I receive my funds? How can I use these funds? What if I already have a mortgage? Can I make payments? Can I get out of a reverse mortgage?
Find out the answers to these questions to help you further decide if a reverse mortgage is the right choice for you, or contact me at Rowan Smith Mortgage Broker - City Wide Mortgage Services to assess the amount of equity that you can access. With a mortgage calculator, I can tell you specifically how much money you can get and under what structure.
Reverse Mortgage fees
Reverse mortgage fees are similar to those associated with a regular mortgage and include an appraisal, legal, and administrative fees.
There are approximately $2000 of setup costs to the lender as well as around $1,200 of legal costs to register the charge on the title. This can all come from the proceeds, and no funds are ever required upfront.
Alternative to Reverse Mortgages
There are two lenders in the marketplace that offer this product. As a seasoned mortgage broker, I will guide you in choosing which product is right for you, as they have some small nuances and differences.
If you want to know more about the workings of a reverse mortgage or talk about similar options, reach out to me at Rowan Smith Mortgage Broker - City Wide Mortgage Services. As the most trusted mortgage broker in Vancouver, BC, I focus on getting my clients the best rate, terms, and product that suits their unique financial position. As an independent broker, I have access to far more lenders than the average client is even aware of. I can ensure that whatever lender we place your mortgage with, the strategy we set up for you is optimal for the long term, not the short term.
I offer services like home purchase mortgages, mortgage pre-approval, mortgage renewal/refinance, construction mortgage, private lending, equity mortgage, debt consolidation, and self-employed mortgage. I offer my services to clients across Vancouver, Yaletown, Burnaby, Richmond, Coquitlam, Surrey, South Surrey, White Rock, Langley City, Fort Langley, Langley Township, Aldergrove, Abbotsford, Chilliwack, Hope, and the surrounding areas.
Get in touch with me today!