Reverse Mortgages Canada - What to Consider Before Applying For a Reverse Mortgage
Reverse mortgages are tax-free and don't affect advantages from Guaranteed Income Supplement or Old-Age Security. They also reduce the equity in your home. When you die, your estate must repay the mortgage. Two popular providers of reverse loans are HomeEquity Bank and Equitable Bank. These banks are known as Canadian Home Income Plans. You are able to learn more about these plans and how they work by visiting their websites. Below are a few items to consider before applying for a reverse mortgage.
First, ensure you are eligible. Reverse mortgages are only available to Canadian residents who're 55 or older. The age limit is 65. You should be at the least 55 years of age to be eligible. Second, reverse mortgages can be transferred to some other property. If you decide to move or sell your house, you may well be in a position to transfer the reverse mortgage. However, you should be conscious of what sort of reverse loan make a difference your income and CPP benefits.
While these types of loans offer flexible payment options, they do feature a hefty interest rate. The balance of the loan doesn't have to be repaid before you sell your home. The downside is that you might find yourself in a predicament where you can't afford to move or downsize. And because reverse mortgages aren't tax-free, they are able to erode the equity in your house even faster than you've built. For these reasons, you need to take independent legal counsel before selecting an opposite mortgage.
Besides being tax-free, a reverse mortgage also lets you use the funds to pay off debts or travel. The cash may be used for what you may wish, provided that you don't have any unforeseen expenses. The quantity of interest charged by a reverse mortgage would have been a fraction of what it costs to possess and reside in the house. This implies you'll never have to be concerned about paying off your property again.
The financial consumer agency of Canada suggests that you should look at an opposite mortgage carefully before taking one. You should consider simply how much the loan will run you and what you're willing regarding it. An opposite mortgage isn't a negative idea if you're over 55, but you need to be cautious in this sort of loan. There are many advantages to reverse mortgages. You don't have to reside in your house or have to make monthly payments.