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13
Reverse mortgages – what’s the scoop?
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Reverse mortgages – what’s the scoop?
For many Canadians, the prospect of retirement holds more questions than it does answers. However, if you’re a homeowner, the equity you’ve built up in your property could provide the answer that helps turn your dreams of retirement into a pleasant reality. With a reverse mortgage, you can unlock the equity that’s present in your home and use it to generate an income to supplement your reduced earnings after retirement.
With a reverse mortgage, instead of paying the bank or lender, they pay you. The payment is based on a percentage of the amount of equity that’s present in the home. For example, if your home is valued at $300,000 and your mortgage is paid off, you have your home’s full value to work with. If you took out a reverse mortgage for 40% of your home’s value – in this case, $120,000 – this amount is then set up in a fund that pays you a stated amount, usually monthly. This regular payment – or annuity – can then be used toward your living expenses while you’re earning less money. There’s usually an age requirement – say 60 or 62 years of age to qualify, so you should ask your lender about this.
Eventually, your home equity is also used to discharge the loan. You don’t have to make loan repayments while you’re living in the property, since that would defeat the whole purpose of the loan. The reverse mortgage loan doesn’t come due for as long as you live in your home. You’re under no obligation to sell by any given time, but when you do, the reverse mortgage loan is paid in full from out of the proceeds of your home sale.
Wondering what your home is worth today? Call Radu today and schedule an appointment with him. Whether you’re dreaming of early retirement, financing a higher education, renovating your home or even buying an income or vacation property, Radu can help. Why wait to make your dreams come true?
For more Mortgage Financing articles, please read my recent Mortgage Financing: Mini Series.
Mortgage Financing: Mini Series
- Mortgage Financing: Mini Series - Intro Introduction
- Mortgage Financing: Mini Series - Part 1 Credit Bureaus
- Mortgage Financing: Mini Series - Part 2 Mortgage Terminology
- Mortgage Financing: Mini Series - Part 3 Pre-Payment Options
- Mortgage Financing: Mini Series - Part 4 Pay Off Faster Strategies
- Mortgage Financing: Mini Series - Part 5 Home Equity Loans
For more information, contact:
Radu Medan
Sales Representative
Coldwell Banker Case Realty, Brokerage
416.250.9000
rmedan@trebnet.com
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March 13th, 2007
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