FAQs about Reverse Mortgages

A reverse mortgage is a smart way for Canadians 55+ to access the equity they’ve accumulated in their home as tax-free cash.

Most common uses of a Reverse Mortgage include:

1. Pay off mortgage and other debts, or even arrears, eliminating those monthly payments

2. Access to funds for aging in place, renovations, home care and regular expenses like special levies and home maintenance

3. Helping family with an early transfer of wealth.  It is a great way to gift a down payment as qualification is not income based, and NO-ONE has to make a regular payment.

4. Purchase of a new primary residence or a rental/vacation home without having to debt service or make a monthly payment.

Will the homeowner owe more than the house is worth?
The homeowner keeps all the equity remaining in the home. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid.  The equity remaining depends on the amount borrowed, the value of the home, and the amount
of time that’s passed since the reverse mortgage was taken out.

Will the bank own the home?
No. The homeowner retains title and maintains ownership of the home. It’s required for the
homeowner to live in the home, pay taxes on time, have home insurance, and maintain the
property in good condition.

What if the homeowner has an existing mortgage?
For clients that have an existing mortgage, the first step we will take is to pay off your conventional mortgage along with any other secured debt.

Should reverse mortgages only be considered as a loan of last resort?
No. Many financial professionals recommend a reverse mortgage to supplement monthly income instead of selling and downsizing, or taking out a conventional mortgage or a line of credit.

What fees are associated with a reverse mortgage?
There are one time fees to arrange a reverse mortgage such as an appraisal fee, fee for
independent legal advice as well as our fee for administration, title insurance, and registration.  With the exception of the appraisal fee, these fees are paid for with the funding dollars.

What if the homeowner can’t afford payments?
There are no monthly payments required as long as the homeowner is living in the home.