Reverse Mortgages: The Good, and the Misunderstood

Most homeowners dream of the day they make their final mortgage and own their home outright. Few think about what it might be like to have their home make payments back to them.

This is called a reverse mortgage, where for those of a certain age and who own their home outright or have a substantial equity position can take advantage of that equity in their home, through the lender, who in-turn provides a portion of that equity back to the homeowner. 

The CHIP Reverse Mortgage, allows qualified individuals to continue to living in their home without ever having to make any payments, and at the same time receive a lump-sum (single advance of all available funds) to be used for whatever you like and/or subsequent advance (partial initial advance and open for future advances). Typically, the loan does not have to be repaid until the house is sold or the homeowner passes.

While the majority of homeowners of all ages continue to take the "re-fi route" when it comes to pulling additional capital out of their homes, a growing number, baby boomers in particular, are turning to a reverse mortgage as a way to supplement their retirement income.

Reverse mortgages can be beneficial for seniors with little to no income who wish to remain in their current home but may have various types of medical or life expenses (debt, renovations/improvement, travel, help children/grandchildren) to pay for and are  on a fixed income and can't afford or qualify to take on more debt. 

The typical maximum a homeowner can get in a CHIP Reverse Mortgage is up to 55% of the value of the home (dependent upon age, location and type of home). There is no income qualification for a reversed mortgage, so if you are the age of 55 or older and you decide to stop working you can choose to live off of your home as opposed to struggling to make payments each months.

For more information about the CHIP Reverse Mortgage or Income Advantage plan, call me, Steven Porter, Mortgage Agent and Certified Reverse Mortgage Specialist at 1-905-875-2582.

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