Mortgage Blog
Quality advice, quality service and the best mortgage rates
What Is A Reverse Mortgage?
April 18, 2022 | Posted by: Marc Crossman
Typically, when tapping into your home’s equity, one uses a home equity line of credit (HELOC) or refinances their mortgage. What if we told you this was not the only way to free up home equity for other purposes? While a traditional mortgage is a loan secured by a home or property, the borrower must pay back the loan each month with interest throughout the loan lifetime. A reverse mortgage is the opposite. So, what is a reverse mortgage anyway?
A reverse mortgage is exclusive to Canadians over the age of 55. In a reverse mortgage situation, the homeowner can borrow as much as 55 per cent of the current home’s value. In other words, they are borrowing against the equity in the home. The borrower receives the money and does not have to make any payments on this loan until they either sell their home or pass away (to be repaid by your estate).
As stated above, to be eligible for a reverse mortgage in Canada, the applicant must be over the age of 55, own a home, and every person listed on the home’s title must be above the age of 55. To be approved for a reverse mortgage, the financial institution will fact check your application, run a thorough analysis of your home’s condition to appraise the value, and verify that you live in the house for at least six months every year.
Click here for the full article and to find out the pros and cons of taking out a reverse mortgage: https://blog.remax.ca/what-is-a-reverse-mortgage/
Have questions, or need advice? Give us a call today at 780 701 3888 or email marc@albertamortgagepros.ca
