Reverse Mortgages London Ontario
What is a Reverse Mortgage?
A reverse mortgage is an increasingly popular consumer loan for Canadian homeowners age 55+. Reverse mortgages in London, Ontario allow homeowners to tap into the home equity they have built up in their homes. There are no monthly mortgage payments, but homeowners are still responsible for paying property taxes, insurance, and maintenance.
The loan repayment is deferred until the homeowner passes away, sells or moves out of the home. Because there are no monthly mortgage payments and homeowners can receive their home equity as tax-free cash, tens of thousands of Canadian homeowners have taken out a reverse mortgage.
A reverse mortgage accesses equity from your home
We can access up to 55% of your home’s value. How do we do it?
1. Speak to Garrett Mortgages, discuss your circumstances, and have your questions answered.
2. Should you proceed, we will arrange an independent appraisal of your home. Once the appraisal is complete, like a conventional mortgage, you will be asked to complete some paperwork.
3. We require you to review the information with an independent lawyer before everything is finalized.
4. You will receive your tax-free money.
Did you know that reverse mortgages in Canada increased by 30% in 2022 to over $1 billion for the second year in a row? The main benefit of a reverse mortgage is that homeowners can access equity in their home without the need to sell.
At Garrett Mortgages/CENTUM, we use a CHIP Reverse Mortgage to reverse the financial equation. Like many individuals, your net worth will be tied up in savings and your home when you reach retirement. With the increase in the housing market, the majority of your net worth could be derived from your home.
With a CHIP Reverse Mortgage, you can access the equity in your home without giving up ownership. Contact us today to learn about the latest CHIP reverse mortgage rates in Canada.
Pros and Cons of a Reverse Mortgage
What are the pros and cons of a reverse mortgage?
There are several factors to consider before proceeding with a reverse mortgage. As with any significant decision, it’s helpful to understand the pros and cons associated. Some of them include the following:
Pros:
- You continue to live in your home and retain the title to your home. All you have to do is continue to pay your property taxes, insurance, and maintenance.
- You receive the loan proceeds as tax-free cash and can use the money as you see fit.
- You do not make monthly mortgage payments until you decide to move or sell.
- A reverse mortgage is a non-recourse loan. Neither you nor your heirs are liable for any amount of the mortgage that exceeds the value of your home as long as you have paid your property taxes and insurance.
- You choose how you would like to receive the funds – from all at once to advances over time – there are flexible options.
Cons:
- Because no monthly mortgage payments are required, interest rates can be higher for a reverse mortgage than other secured lending options.
- The loan balance increases over time, as does the interest on the loan.
How to Qualify for a Reverse Mortgage in Canada
- The title holder(s) on the property need to be 55 years or older.
- The home that is used with the reverse mortgage must be your primary residence.
- If you have a remaining mortgage or any debt that used the home as security, the monthly payment from your reverse mortgage will be put towards those debts first with the remaining amount of cash going to you.