As the population in Canada ages and consumer debt remains high, we are beginning to encounter situations where clients find themselves with reduced income, high debt and no way to keep their home. With a reverse mortgage we are able to Finance, Refinance assist to Purchase a different property, help seniors stay in their home. It also gives them ability to cover life expenses such as debt, renovations, travel and can help pay for home care or medical expenses.
There are two plans available, a lump sum single advance of available funds or a partial initial advance with an option for future advances. The maximum loan to value is up to 55% for a reverse mortgage and the age range is between 55 and 80 years. The minimum mortgage amount is $25,000.00 for lump sum initial advance and minimum $10,000.00 for each subsequent advance. No payments of principal or interest are required as long as the home owner lives in the home. Following are two different scenarios to help you understand the Reverse Mortgage in Canada.
Foreclosure – James is a widower living in the same home that he and his wife purchased after their wedding 55 years ago. It is where they raised their family and it is dear to him. Over the years James has helped his children financially and his bills started to accumulate. He then discovered that his property taxes were in arrears and that the property was going into foreclosure. The property was also in need of renovations and James needed a little extra to supplement his income. James’ mortgage broker immediately sourced out a reverse mortgage bank to determine his eligibility for a reverse mortgage. James was able to secure a reverse mortgage and with the proceeds pay the taxes, stay in his home and complete the renovations with some money left over to supplement his income.
Downsizing – Larry and Marilyn want to downsize from their large home to a retirement community so that they have a smaller property to maintain and can travel while still able to do so. Many of their friends also live in the community that they want to retire to. They have however accrued a great deal of debt over the years for one reason or another. They needed over $800,000.00 to afford the villa and clear their debt. One option they considered was a reverse mortgage. They chose to sell their home and take out a reverse mortgage. Funds from the sale of their home financed their new home in the retirement community and the funds were used to pay off their debt and improve their cash flow, and improving their lifestyle. With no regular payments required, Larry and Marilyn can now live stress-free and enjoy their retirement with friends.
We have partnered with the best reverse mortgage bank in the nation and are confident in their ability to work with our clients for a solution that best meets their needs.
If you or someone you know could benefit from this type of mortgage then we would be happy to explain the process further and if it is something that appeals then we would help facilitate the application.