6 Myths Behind Reverse Mortgage Solutions
The Seniors’ Lending Centre team takes great pride in offering a wide array of home financing solutions to older Canadians, whether to cover the costs of retirement plans or otherwise. Reverse mortgages are hugely popular in this regard, allowing you to borrow against your home’s equity to secure funds – click here to learn more about our options!
However, there are several myths out there that you should be aware of, many of which result in complaints against reverse mortgage solutions from folks unfamiliar with how they really work. Today, let’s go over the most common ones to help you make a more informed decision regarding your finances!
“You Can Only Get a Reverse Mortgage if You’re Retired”
This is incorrect. In fact, Canadian homeowners as young as 55 years old can apply for a CHIP reverse mortgage, and the Seniors’ Lending Centre team is happy to help you complete, submit, and manage your application in a convenient and stress-free manner (click here to learn more). That being said, if you are older and closer to retirement age, it’s possible that you may qualify for a higher amount. Of course, this also depends on the value of your home’s equity.
“Interest Rates Are Too High”
Reverse mortgages in Canada generally don’t require that you make recurring payments, unlike with a regular mortgage. Instead, the interest rate is slightly higher, though not by much. In exchange, you can manage payments without worrying about penalties or missing due dates. This makes it a better option for seniors who are more limited in terms of monthly income. What’s more, it’s also easier to qualify for a CHIP reverse mortgage compared to a regular mortgage.
“You’ll Need Mortgage Insurance”
Contrary to popular belief, you don’t need mortgage insurance for a reverse mortgage! When working with an expert brokerage focusing on seniors such as ours, your estate is well looked after. We guarantee that neither you nor your heirs will owe more than the value of the property.
“Reverse Mortgages Come with High Taxes”
Nope! This isn’t true if you take the right approach. Canadian reverse mortgages can be used to secure funds that can be deposited into investments. That way, all your interest charged is tax-deductible! In addition, with a CHIP reverse mortgage, the money doesn’t qualify as taxable income so it won’t cause any problems with your pension or other sources of income from the government. Be sure to reach out to us if you need help with saving on taxes and any investment plans.
“The Bank Gets Your Home!”
One of the most common complaints against reverse mortgage solutions is that the lender assumes ownership of your home. This couldn’t be further from the truth. You’ll continue to own your home just as before! Nothing changes aside from the requirement to pay property taxes, cover maintenance costs, look after the property in question, and ensure an adequate fire insurance policy is active for it.
“Homeowners Can Get Evicted”
This is false. The home remains yours and no one has any right to evict you from it in this context. You’ll only be asked to pay back the loan amount if you decide to sell, move, or if you and your spouse both pass away. In the latter case, your heirs will assume this responsibility, but they still won’t be forced to sell. Instead, they’ll have the option to pay it off in a financially realistic manner that aligns with their income first, and CHIP reverse mortgages guarantee they’ll never pay more than what the property is worth.
Want to learn more about reverse mortgages? We’re happy to help here at the Seniors’ Lending Centre. To get started, click here to fill out our form and download a free reverse mortgage guide. We’ll then send you a no-obligation quote within 24 hours. For further assistance, you can always reach us by clicking here to send an email, or call at (604) 614-2382.
