Home Page of Mississauga Homes and Properties for SaleCondos for sale in MississaugaMississauga Power of Sales ListingsView Mississauga MLS Listings Properties For SaleMortgage Interest Rates in the Toronto, GTA and MississaugaToronto, GTA Mississauga Public Open HousesMarks Contact Information and Profile

You are here: 

Reverse Mortgages - What are they and is it something you may want?Click for larger graph of Toronto CMA Housing Starts

What is a Reverse Mortgage?


First, what a reverse mortgage is NOT:

A reverse mortgage is not “a way for the bank to get your house”
It is not a traditional home equity loan
It is not based on income or credit levels
It is not available to homeowners under the age of 62
It is not free money
It is not a cure-all
It is not a decision to be taken lightly

What a reverse mortgage is: a good tool for financial planning and flexibility in the golden years. There are only a very few requirements for eligibility. The borrower must own and live in the home as a primary residence and be 62 years of age or older. If husband and wife are both on the title, both must be over the age of 62. However, visit the Reverse Mortgage Page to find out more information on this particular fact.

Canadian Real Estate Association LogoOntario Real Estate Association Logo

Summary

In addition, the home itself must be of a type that qualifies for the reverse mortgage program. The vast majority of single family homes qualify, as do most condominiums, townhomes, 2-4 unit owner-occupied dwellings and manufactured homes. Your income and credit levels, however, do NOT matter.

To go through the process of getting a reverse mortgage you will need to speak with a reverse mortgage originator or provider. This person will guide you through the preliminary steps, including counseling, home appraisals, inspections, and choice of loan specifics. It is very important to feel comfortable with your lender. Feel free to speak with as many people as you need in order to gain information and feel comfortable. Click here for reverse mortgage lenders.

There are a number of options for how to “structure” the money received.

1. Receive a one time lump sum.

2. Receive the money monthly.

3. Receive a credit line that provides flexibility.

4. Use a combination of the above methods.

Once you receive the money, there are virtually no restrictions on the way in which it can be used.

You MUST:
Repay existing debt, including the existing mortgage

You Can:

Make Home Improvements
Finance Regular Living Expenses
Ease Healthcare Costs
Take a Trip to Somewhere You’ve Always Wanted to Go
Give Gifts to Your Family and Friends

It almost seems too good to be true. There are, however, as with everything these days, costs involved. There is an origination fee, closing costs, a servicing fee, mortgage insurance, and interest. These costs come from the proceeds of the loan. You pay very little directly out of your pocket.

You should also know that you cannot lose your home at any time during the life of the loan for failure to make payments. THERE ARE NO PAYMENTS TO MAKE. The loan does not come due until you permanently leave the home or the last borrower dies. The home must be kept up to reasonable standards, it must be insured, and the property taxes must be paid.

Default risk is one of the ways in which a reverse mortgage differs from a traditional mortgage or home equity loan. With those traditional products there is a risk of default and therefore a chance you could lose your home. On the other hand, there are no payments to make with a reverse mortgage. Therefore, as long as the property is kept to a reasonable standard, you will always have somewhere to live.

In addition, you can never owe more than the value of your home. Even if you have been paid more than your home is worth, you can only owe the value of your home. When the loan comes due, you or your heirs can either pay off the loan with existing funds or sell the house in order to satisfy the loan. Excess proceeds from the sale go to your or your estate.
This article courtesy of www.reversemortgagepage.com



I can assist you with all of the complexities when you purchase or sell your next home. Please don't hesitate to email me

If you have any questions or require further information, please please .

Thank you,

Mark

 

Ask, and ye shall receive. click the Genie or  Search the web and/or this website! send me an email with the MLS numbers and I'll get you the full MLS listing right away!
Page copy protected against web site content infringement by Copyscape

Excellent, I am ready to begin my home search   Read more about investment properties

 


Mississauga MLS Real Estate Properties & MLS.CA Homes for Sale  | All Pages including Mississauga Real Estate Blog all maintained by info@mississauga4sale.com Copyright © A. Mark Argentino, P.Eng., Broker, RE/MAX Realty Specialists Inc., Brokerage, Mississauga, Ontario, Canada L5M 7A1 (905) 828-3434  First created - Tuesday, July 16th, 1996 at 3:48:41 PM - Last Update of this website: Monday, January 1, 2024 9:34 AM
At this Mississauga, (Erin Mills, Churchill Meadows, Sawmill Valley, Credit Mills and / or Meadowvale ) Ontario, Canada Real Estate Homes and Property Internet web site you will find relevant information to help you and your family.


REMAX Mississauga Real Estate NewsletterReal Estate Market Watch Newsletter

Why Subscribe?  You will receive valuable Real Estate information on a monthly basis - such as: where to find the 'best' mortgage interest rates, Power of Sale Properties and graphs of current house price trends.  Plus, you will pick up ideas, suggestions and excellent real estate advice when you sell or buy your next home. Read Past Newsletters before you decide 
Privacy-Policy
Your e-mail: