Clearing up misconceptions about reverse mortgages

Reverse mortgage myths

A reverse mortgage is a financial tool that empowers homeowners aged 55 or older to unlock up to 55% of their home's value as tax-free cash.

Unlike traditional home equity lines of credit or conventional mortgages, it offers the unique advantage of not requiring monthly mortgage payments as long as you reside in your home. With its growing popularity, it's crucial to separate fact from fiction and address common misconceptions surrounding reverse mortgages.

Myth: The bank owns your home.

Fact: You retain control and title ownership of your home. You have the freedom to decide if and when you want to move or sell, granting you complete autonomy over your property.

Myth: You'll owe more than your home is worth.

Fact: Clients can qualify for up to 55% of the appraised value of their home, with an average of 33%. Lenders adhere to conservative lending practices, ensuring that equity remains in the home when the loan is eventually repaid. Over 99% of reverse mortgage clients still have equity remaining in their homes after the loan is paid out.

Myth: Reverse mortgages are a last-resort solution.

Fact: Many financial professionals now recommend reverse mortgages as a vital component of a comprehensive retirement plan. It offers unparalleled financial flexibility, enabling tax-free funds to extend the lifespan of retirement savings.

Myth: Existing mortgages hinder eligibility for reverse mortgages.

Fact: Reverse mortgages can be used to pay off existing mortgages and other debts, freeing up valuable cash flow. Imagine the relief of eliminating regular mortgage payments and having more financial freedom.

In addition, it's important to understand two key points:

1. Homeownership: You maintain full ownership of your home as long as you fulfill your obligations of paying property taxes, home insurance and keep the property well maintained. You will never be forced to move or sell your home.

2. Government benefits: A reverse mortgage will not impact any government benefits you may receive, such as Old Age Security (OAS), Canada Pension Plan (CPP), or Guaranteed Income Supplement (GIS).

To determine if a reverse mortgage is a suitable option for you, take advantage of a no-obligation assessment. As a certified reverse mortgage expert and impartial mortgage broker, I can confidentially review all available mortgage options tailored to your unique circumstances. The assessment takes only 90 seconds, so please don't hesitate to email [email protected] or you can book a time for a chat here on my calendar. www.calendly.com/april-dunn

By dispelling myths and gaining accurate information, you can make an informed decision about whether a reverse mortgage is the right choice for your retirement goals. Secure your financial future and enjoy the benefits of this valuable financial tool.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

More Mortgage Matters articles

About the Author

April Dunn is the owner and a Mortgage Broker with The Red Door Mortgage Group – Mortgage Architects. For over two decades, she has been helping clients to arrange their financing to purchase a home, refinance, or renew their mortgages. Drawing from her extensive experience as a Credit Union manager, a Residential Mortgage Manager with a large financial institution, and as a Mortgage Broker, April has the necessary expertise to design a tailored mortgage plan with features and options that cater to each client's individual needs. April offers a complete range of residential and commercial mortgage financing services to clients throughout British Columbia and the rest of Canada through her affiliation with the Mortgage Architects network.

Contact e-mail address: [email protected] or by phone at: 1-888-561-2679.

Website: www.reddoormortgage.com

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

Previous Stories