True facts about reverse mortgages

couple happy they read the true facts about reverse mortgages
Mark Price
October 17, 2022
linkedin iconfacebook logotwitter logo
couple happy they read the true facts about reverse mortgages

The reverse mortgages of the past are not the reverse mortgages of today.

Did you know that three are multiple lenders providing reverse mortgages?

As mortgage brokers we are here to help guide you and look at all options so you can make an informed decision about whether or not this product is good for you and your family.

How do Reverse Mortgages work?

Seniors in Canada have access to a reverse mortgage as a tool for financial flexibility throughout retirement. With a Reverse Mortgage, you can get tax-free access to up to 55% of the cash worth of your house. There are numerous purposes for reverse mortgages, including:

  • Increasing retirement income and living standards generally
  • Making house improvements
  • Spending money on vacation or other experiences
  • Settling debts
  • Giving loved ones a living inheritance
  • Financing medical and in-home care costs
  • Buying a new house

There are no regular principal or interest payments necessary with a Reverse Mortgage, which is one of its main advantages. You don't have to pay the balance until after you've stopped living in the house, but interest is applied to the debt. The proceeds are generally tax-free and have no effect on the government retirement benefits you are currently getting.

Some Myths Relating to
Reverse Mortgages

Reverse Mortgages have the incredible ability to give 55+ Canadian homeowners and their families financial flexibility, but there are still a lot of myths around this product. Here are a few illustrations:

Myth: Your home is no longer yours.

Some people are concerned that obtaining a Reverse Mortgage may result in them losing ownership of their home. The exact opposite, though, is true. With a Reverse Mortgage, you can access up to 55% of your home's worth while keeping 100% of the ownership. No matter how long you live there or what happens to the value of your house, this is true. It's your house.

Myth: You may owe more than the value of your home.

You and your family will never owe more on a Reverse Mortgage than the house's fair market worth when you leave it thanks to the  Lender Guarantee. The lender takes the loss if the mortgage balance ever exceeds the value of the house. The nicest thing is that you keep your home's value if it increases in value.

Myth: The family home will be lost to your children

When you leave or pass away, the mortgage does become due and payable, just like a normal mortgage, but the house remains the property of your estate. This implies that your children would always be able to refinance the mortgage or settle it in another manner. In the end, your family is in charge.

Myth: Your heirs won't receive any equity in the house.

The equity in the residence is still yours! In an economy with rising home prices, both the loan balance and the value of the home increase over time. The majority of the home owners with Reverse Mortgages still have a sizable amount of home equity to give to their heirs as an inheritance.

click to talk about a reverse mortgage

The Reverse Mortgage Reality

A Lender Guarantee is included with a Reverse Mortgage. In the event that real estate values decline or the loan total exceeds the value of the residence, the borrower is guaranteed not to owe more than the property's fair market value.

Reverse Mortgages provide reassurance

Due to their "set it and forget it" nature, Reverse Mortgages are popular with many borrowers. You won't have to make a mortgage payment throughout the loan period, and you can stay in your house for as long as you wish as long as you maintain your property obligations, such as paying your property taxes and insurance, and maintaining your home in excellent shape. Other products, like HELOCs, have "loan to value caps," which means that if the loan total goes over a specific threshold, you'll have to sell your house to pay off the remaining sum. With a Reverse Mortgage, that can never happen.

Home Equity Can Increase Continually

Some homeowners are concerned that the balance of a Reverse Mortgage may eventually deplete the equity in their house. However, home equity can continue to build as home value increase.

Tax-Friendly

From a tax viewpoint, Reverse Mortgage proceeds are considered favourably. According to the Canada Revenue Agency, Reverse Mortgage payments are treated the same as loan advances from a traditional mortgage, which means they are not subject to capital gains tax.

This is in contrast to selling investments from your retirement portfolio to pay expenses, which is typically accompanied by capital gains tax.

Reverse Mortgage demand is increasing.

In Canada, demand for Reverse Mortgages is rising as 93% of Canadians would rather retire in their own home that they love and where they have years of wonderful memories.

Second, downsizing to a new home can be both costly with high real estate commissions and moving is always stressful.

A Gain in Money

You'll see how a Reverse Mortgage can assist any senior Canadian who wants to make the most of their retirement years once you fully understand all of its advantages.

Boost Your Financial Independence

What are your retirement aspirations? Do you want to go on a trip, make home improvements, or give your children or grandchildren money for a down payment?

You can have this financial flexibility with Reverse Mortgages.

When you start to dispel the myths about Reverse Mortgages and understand how beneficial reverse mortgages can be, it becomes obvious that this is a product worth learning more about.

Share this post
linkedin iconfacebook logotwitter logo
couple happy they read the true facts about reverse mortgages
Mark Price
Director, Mark Price Mortgages

More Posts

arrow left
arrow right
family hugging and smiling

5 unexpected uses for Reverse Mortgages

Here 5 unexpected uses for your reverse mortgage.
family hugging and smiling
Mark Price
October 24, 2022
reverse mortgage loan image on computer screen

Taking out a reverse mortgage loan: A guide for 55+ homeowners

A guide on how to take a reverse mortgage for 55+ homeowners.
reverse mortgage loan image on computer screen
Mark Price
October 24, 2022
man paying by credit card reverse mortgage with bad credit

Reverse mortgage with bad credit

Have bad credit but need finance? Here's our guide.
man paying by credit card reverse mortgage with bad credit
Mark Price
October 24, 2022
couple looking at computer

I need to get rid of my Debt!

Need to get rid of your debt? Here's our guide.
couple looking at computer
Mark Price
January 9, 2023
stressed older women

Cash flow issues in retirement

Having cash flow issues in your retirement? Read this...
stressed older women
Mark Price
October 21, 2022
three people talking

Making accessibility renovations to your home

How to make accessibility renovations to your home. The complete guide.
three people talking
Mark Price
October 23, 2022
man thinking about Mortgage stress test Canada

Mortgage stress test Canada

What is Canada dreaded mortgage stress test?
man thinking about Mortgage stress test Canada
Mark Price
October 24, 2022
older couple hugging and happy

In-home care versus long-term care facilities

Is in-home care better than long-term care solutions?
older couple hugging and happy
Mark Price
December 6, 2022
family meeting

Give a living inheritance to your family

Want to give a living inheritance to your family read this.
family meeting
Mark Price
October 24, 2022
older man applying for a reverse mortgage

How to apply for a Reverse Mortgage

How to apply for a reverse mortgage, the complete guide.
older man applying for a reverse mortgage
Mark Price
October 23, 2022
older man holding his hand up

The Home Equity Lender Guarantee

Learn about the home equity lender guarantee.
older man holding his hand up
Mark Price
October 21, 2022
older couple sitting on the sofa

Comparing reverse mortgages to Home Equity Loans, (HELOC) and alternative financing strategies

We compare reverse mortgages to home equity loans, (HELOC) and finding alternating financing strategies.
older couple sitting on the sofa
Mark Price
December 5, 2022
couple happy they read the true facts about reverse mortgages

True facts about reverse mortgages

We discuss the myths vs the facts of reverse mortgages.
couple happy they read the true facts about reverse mortgages
Mark Price
October 21, 2022
couple want to know what is a reverse mortgage canada

What is a Reverse Mortgage?

What is a reverse mortgage? In this post, we explain it all and how it works.
couple want to know what is a reverse mortgage canada
Mark Price
October 23, 2022
© 2022 Axiom Mortgage Solutions
1425 Ellis St, Kelowna, BC V1Y 2A3, Canada