No Payments. Don’t pay a cent. No money down. You’ve heard every pitch when it comes to selling furniture, appliances or TV’s. But don’t pay a cent on your mortgage? That’s a new one, don’t you think?!
Enter the reverse mortgage, where you don’t EVER actually have to make a mortgage payment, as long as you are living in the property.
Here are some commonly asked questions and answers about reverse mortgages:
Q: What is a reverse mortgage?
A: A reverse mortgage is a mortgage where you don’t have to make payments. Normally, the interest accrues. You can make payments if you want to, but you don’t have to.
Q: Will I ever owe more on my mortgage than the house is worth?
A: This is very unlikely.
Q: How much money can I borrow?
A: The answer to this question depends on your age and the property value. You must be at least 55 years old to qualify. Your income, or lack of income, and credit, rarely factor into the equation.
Q: Will I ever lose my property because I put a reverse mortgage on it?
A: No, that is one of the great things about the reverse mortgage. You never have to make mortgage payments as long as you are living in the property. You do need to pay the property taxes and insurance on the property though, and obviously you should also maintain the property.
Q: What can the funds be used for?
A: Funds can be used for any purpose; vacation, give a child money to help with down payment on his/her property (pre-inheritance), investment, nursing care, renovations, pay taxes, debts, or anything else.
Q: If I need money, why wouldn’t I just get a regular mortgage?
A: With a regular mortgage you need to meet the bank’s stringent lending guidelines for income and credit. The lending rules to qualify for a reverse mortgage are far more flexible. Also, with the reverse mortgage, you can live in the house till you are 120 years old and never have to make a payment. Finally, from a tax planning perspective, it makes sense because you can remove equity out of your property and pay yourself tax free.
To find the right mortgage solution for your needs, call me today. I deal with dozens of institutional and private lenders. It’s all about finding the right mortgage solutions for you! I look forward to hearing from you!
David Grossman MBA
Loan Central Canada/RMA, Lic #10464
416 876 2031