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Home Income Plan (Reverse Mortgage in Canada)
Understanding a Reverse Mortgage in Canada
A Reverse Mortgage in Canada is like any other mortgage with several exceptions: it is only available to seniors aged 55 years or older and there are no monthly repayments required to pay back the mortgage. Because there are no repayments, there are also no credit-checks or income requirements.
The main feature of a Reverse Mortgage Loan is that a senior may carry a reverse mortgage for 5, 10, 15 or even 25 years or more and never be required to make a monthly mortgage payment. Historically, house prices tend to increase. With a Reverse Mortgage in Canada the balance of the loan slowly accrues over time... while at the same time the home’s value continues to rise. This process ensures equity in the home over the long term.
Regardless of market fluctuations, the Canada Reverse Mortgage lender guarantees, no matter what, that the loan balance will not exceed the fair market value of the home. In other words, you can never owe the lender more than the value of the home. Low interest rates in these types of loans reflect the confidence that a Lender feels in their exposure to loss due to market value fluctuations. Entering into a Reverse Mortgage in Canada is a great option for a Senior who needs access to their home’s equity but doesn’t want to be concerned about their debt exceeding the value of their home.