7 Benefits of Reverse Mortgages
Reverse mortgages have numerous benefits apart from the money. In this article we will explore and break down some of the benefits.
#1: You stay in your home.
You own your home until you decide to sell or stay in your home forever. No worries about downsizing. Stay in the neighborhood you love. No payments are required.
#2: No Negative Guarantee.
You will never owe more than your house is worth. There are clauses for a no negative guarantee and no more than fair market value. By using SimpleReverse.ca we will go over this in detail. Also, Canadian law requires that every client getting a reverse mortgage in Canada gets an ILA lawyer. An ILA lawyer is for your Independent Legal Advice. You are protected, but know the facts before signing so that you can confidently make the right decision.
#3: Most clients still have considerable equity left in their homes.
The reason that most clients still have equity in their homes is that their properties are appreciating in value yearly. The appreciation offsets a large portion of the interest. We will provide an estimate showing projected interest rates with appreciation.
#4: You can receive your funds in full or an annual amount.
Option 1: Take all of the funds immediately.
Option 2: Get a monthly amount advanced eg: $1,000.00 per month, or a lump sum and the balance monthly. Decreasing your interest. You choose the amount.
#5: No Tax Liability.
A reverse mortgage is a mortgage loan therefore no taxes payable on your advance. Similar to a regular mortgage, but no payments required with accrued interest.
#6: Making payments is your choice.
Most clients do not make payments, but there are options. You can pay the interest monthly or put up to 10% payment annually on the anniversary date. The prepayment goes towards interest first. This is good if you suddenly have extra cash that you do not need. You can do this any year of the term.
#7: Your Heirs Options.
In an estate situation your heirs can opt to sell the home and pay out the mortgage & estate taxes. They can also keep the home, payout the mortgage outstanding & estate taxes. If for some reason there is no equity left, they can simply give the keys back with the no equity guarantee.
Some of the most common reasons Canadians get reverse mortgages:
- Pay down debt
- Not having to take money out of their investments
- Lending adult children down payments
- Funds to travel and enjoy retirement on an annual basis
- Short term loans
- Purchasing a new home (Sell existing and reverse the new home)
Get in touch with us today to learn how you can personally benefit from a reverse mortgage.