How can I use the money that I borrow from my reverse mortgage?
The use of funds are up to you! You can use them to cover daily expenses, renovations, medication, family needs, trips, in-home care, or to help a family member with their down payment (while you still get to keep your home).
Which lenders does Homewise work with to fund their client's reverse mortgages?
Homewise acts as a mortgage Advisor for clients to provide advice on if a reverse mortgage is right for our clients and from which lender. We work with multiple lenders, which include Equitable Bank and CHIP through Home Equity Bank. Our goal is to help clients determine which lender provides them the best option for their unique needs.
What provinces do Homewise Reverse Mortgage partners provide loans:
- British Columbia
- Nova Scotia
- New Brunswick
- Newfoundland and Labrador
- Prince Edward Island
Will the bank own my home if I get a reverse mortgage?
The bank will not own your home. You keep ownership.
Is it possible that I could actually owe more than the value of my home?
If you meet your mortgage obligations, you will not owe more than the fair market value of your home on the due date.
Is there a way to reduce the interest owed?
You can take out funds when needed, you do not need to take a big lump sum at one time if you do not want to. This will reduce the interest that accumulates. You can also take the option of paying down interest monthly, without any prepayment charge.
Will I still own equity in my own at the end?
At any point of the mortgage, the amount of equity of your home that you still own will be the difference between the amount owed on the reverse mortgage and the current value of the home.
Why are reverse mortgages interest rates higher than a standard mortgage?
As reverse mortgages do not have any required payments until the mortgage is due, the rates are often slightly higher.
Can the lender sell or foreclose on my home?
If you meet the guidelines and terms of your reverse mortgage, you should have no issues with losing your home to the lender.
I already have a mortgage, can I get a reverse mortgage?
Any mortgage must be paid off in order to get a reverse mortgage. That said, you can use the funds from an initial advance of funds to pay off an existing mortgage (or even a lien) that is against the property.
What happens if my spouse passes away. Will I need to sell my house?
No. As long as both spouses are registered as joint tenants on the property, you will be entitled to the benefits of your reverse mortgage.
Is my reverse mortgage just one lump sum loan?
There are multiple options for how you can receive funds You can get an upfront one-time advance of the full mortgage. You can also take smaller amounts (minimum of $25,000) in recurring or single fundings.
What about property taxes or home fees?
You are still responsible for all fees associated with your home.
Will you need to pull my credit?
Yes, for all applicants included, a credit report will be needed.
Can someone apply on my behalf, like a power of attorney?
A power of attorney can apply for a reverse mortgage if necessary and is for a legitimate reason.
Are there fees to get started?
There is a fee to setup your reverse mortgage that is charged by the lender. It is generally between $1,000-1,800. You will also need to be prepared to pay for Independent legal advice and an appraisal fee.
What if I live longer than my mortgage, would I risk losing my home?
We have lenders that ensure you remain the owner of the home at the end of the mortgage, as long as you have paid property taxes, insurance and maintain your property. As a borrower, you will never owe more than the value of your home. You mortgage will only become due if you move out of your home, sell your home or pass away.
What if the value of my home goes up?
The appreciate of your home goes back to you. The only interest you pay is based on the amount you borrow
When I pass away, who will be responsible for the payment of the reverse mortgage?
The heirs will be the ones that are responsible for the repayment of the reverse mortgage. What often happens is that they would make the choice to either sell the property to pay off the reverse mortgage or pay it down themselves. Also, when you (and your co borrower if you have one) pass away, your heirs will only the loan and requisite interest on the amount of reverse mortgage that had been received at that time.
Will the reverse mortgage affect Old Age Security, tax liability or any pension/benefits?
Because a reverse mortgage is tax-free, there will be no affect on pension benefits as well as Medicare. For this reason, a reverse mortgage is a good addition to have if RSP and Pension is not enough to support your lifestyle after retirement.
How much will I qualify to borrow for my reverse mortgage?
There are many qualification standards that come into consideration by our lender partners when determining how much they will lend. The key factors are your age (over 55 years old) and the older someone is the more they will generally qualify for. The next important factors are location and appraised value of the home. Your Homewise Mortgage Advisor will be able to discuss this with your further.
What documents are needed for a reverse mortgage?
The documents needed after approval will vary, but in general here is a full list of what may be asked for:
- Two forms of photo identification
- Verification that the property is your principal address
- A signed reverse mortgage application
- The legal documents that are required
- Your property insurance information
- If you have an existing mortgage that you have to pay off, the mortgage statement
- A form of proof that property tax payments are up to date
What is the minimum property value needed to qualify for a reverse mortgage?
When qualifying for a reverse mortgage, you will have an appraisal. The appraisal will need to set a value of least $150,000 to qualify.
Interested in learning more about reverse mortgages?
Visit our reverse mortgage page and sign up to speak with one of our Homewise Advisors to get unbiased advice and information. Click here to sign up now.