A reverse mortgage is a special type of loan made to older homeowners, to enable them to convert the equity in their home into cash, to finance living expenses, home improvements, in home health care, or other needs.
With a reverse mortgage, the payment stream is "reversed." That is, payments are made by the LENDER to the BORROWER, which is the opposite of what occurs with a regular home purchase mortgage.
A reverse mortgage is a sophisticated financial planning tool that enables seniors to stay in their home, or "age in place", and maintain or improve their standard of living without taking on a monthly mortgage payment. The process of obtaining a reverse mortgage involves a number of different steps.
In general, reverse mortgages are limited to borrowers 62 years or older who own their home free and clear of debt, or nearly so, and the home is free of tax liens.
Borrowers usually have a choice of receiving the proceeds from a reverse mortgage in the form of a lump sum payment, fixed monthly payments for life, or a line of credit.
Some reverse mortgage products also involve the purchase of an annuity that can assure continued monthly income to the senior homeowner even ifthey sell the home.
The amount of money that the homeowner can receive will depend on the type of reverse mortgage, the borrower’s age and current interest rates, and the home’s property value. “Projected Life Expectancy” is used to determine the amount of the monthly payments or line of credit. In general, the older the applicant is, the larger the monthly payments or line of credit will be. Seniors do not have to meet income or credit requirements to qualify for a reverse mortgage.
Reverse Mortgage features:
No monthly payment. Instead, you are paid each month.
No income or credit qualifying needed.
You maintain title and ownership of your home.
Proceeds from a Reverse mortgage are not subject to personal income taxation.
It is not a government grant, but a loan that is repaid in the future.
Can be used only for the borrower's primary or principal residence.
Our reverse mortgage specialists can help you tap into the equity that has accumulated in your home so you can use the funds. The proceeds can be used for any purpose, and are available in a variety of payment methods such as lump sum cash payments, monthly payments, or an Equity Line.
When you choose our mortgage company, you can feel secure knowing you are working with a trusted leader. Contact us at (778) 400-9868.
YYJ Victoria Mortgage Team 6 4440 Chatterton Way, Victoria, BC, V8X 5J2