Reverse Mortgages in Ontario
Whether it’s for an emergency or a new investment, unlock equity you have saved in your home, and reap the rewards of your hard work.
Your home is your biggest financial investment. But more than the protection it offers you and your family; it also provides financial resources when needed. As a key asset, you can unlock generous returns on your smart investment that can go towards other major, life-changing expenses. You can do these and more with a reverse mortgage from Canadalend.
Throughout years of mortgage payments, you build up equity in your home. A reverse mortgage is a loan that allows you to withdraw from this saved equity, but without selling your property. This is also known as “equity release.”
Benefits of a reverse mortgage
A reverse mortgage allows you to borrow up to 55% of the current value of your home. And because real estate increases in value exponentially, years of accumulated equity can help pay towards other major expenses. All you need to do is fulfill these basic requirements:
You live in your home for at least six months every year, and keep your property in good order
You meet property tax obligations
You follow the loan terms
You have closed any outstanding loans or lines of credit secured by your home.
Use a reverse mortgage to:
Cover everyday living expenses, such as regular bills
Pay for in-home care and healthcare expenses
Pay off loans
Is a reverse mortgage right for you?
When you apply for a reverse mortgage, lenders will consider a few factors, including:
Your age (55 or over) and the age of named owners on the property title
All named titleholders must apply as joint borrowers
Your home’s appraised value, type, and condition
Whether the property you’re applying a reverse mortgage loan for is your primary residence, where you live for at least six months in a year
Your property is detached, semi-detached, condo, or townhome.
Once your reverse mortgage is approved, the amount can be released either as a lump-sum payment, or through a regular payment schedule over a set period. Various lenders offer different payment options, with certain restrictions and fees. Our mortgage brokers will help you find the best option depending on your needs.
How to repay a reverse mortgage?
Repay the principal and interest in full at any time, such as when you move out, sell the property, or upon the death of the last named borrower. Generally, reverse mortgages are paid using the proceeds of the property sale.
With a reverse mortgage, you don’t need to make regular payments until the loan is due; however, your lender may charge a fee if you wish to pay off your reverse mortgage early. Note that the longer you go without making payments, the more interest you accumulate on your loan. As a reverse mortgage allows you to borrow against your existing home equity, you may have less equity in the property at the end of the loan term.
How much does a reverse mortgage cost?
Depending on your lender, these costs may be added to your loan's balance or paid upfront:
Higher interest rates compared to traditional mortgages
Home appraisal fee
Prepayment penalty if you pay off your reverse mortgage before its due date
Legal fees for closing costs and any legal advice.
A reverse mortgage is designed to help you afford immediate major expenses using savings generated by your long-term investment.
The Repayment Process
Repaying your reverse mortgage is simple and affordable. Our mortgage brokers are dedicated to guiding you through your reverse mortgage application, to ensure that you can fulfill the loan obligations, and maximize your home’s equity.
Rather than resort to other types of borrowing, or consider alternative living arrangements, a reverse mortgage can help you reduce your financial obligations by maximizing what you already own in equity. A reverse mortgage helps you maintain your lifestyle as you navigate changes to your financial situation.
Are you planning for major life expenses? Call Canadalend at 1-866-I CAN LEND (422-6536) to see if a reverse mortgage is right for you.