Reasons to consider a reverse mortgage

A reverse mortgage can be a valuable financial tool for seniors seeking to tap into the equity of their homes without selling their homes.

This unique financial solution can provide a source of income, enabling Canadian homeowners who are 55 years of age and older to enjoy their retirement years more comfortably.

Here are 10 signs someone might be a potential reverse mortgage client:

1. Declined at their bank due to credit or income issues

You may have been declined by a traditional bank due to poor credit or a lack of regular income to support a financing request.

2. Facing tax consequences on investments

Seniors who need to cash out investments and are concerned about the tax implications might benefit from a reverse mortgage, which allows them to access funds without being charged any income tax.

3. Payment struggles, late payments or missed payments

Individuals who face challenges with making timely mortgage payments or have missed other payments may find relief through a reverse mortgage, as it doesn't require monthly payments and the funds can be used to pay off debts.

4. Early inheritance assistance for family

Some seniors wish to provide financial support to their family or heirs before they pass away. A reverse mortgage can help them access their home equity for that purpose.

5. Reduced income due to spousal loss

When a spouse passes away, the surviving partner's income may significantly decrease. A reverse mortgage can help bridge this income gap and maintain financial stability while allowing them to stay in the matrimonial home.

6. “Grey divorce” with one spouse buying out the other

Seniors experiencing a "grey divorce,” where one spouse wants to buy out the other's share of the home, can use a reverse mortgage to facilitate this financial transition which will allow them to stay in their home rather than having to sell.

7. Real estate investment or bridge financing

Individuals seeking to invest in real estate or bridge a financial gap might consider a reverse mortgage as a means to access their home's equity without selling it.

8. Children assisting elderly parents with home equity

Seniors with children who are providing financial assistance can use a reverse mortgage as an alternative to being supported by their kids, allowing them to maintain financial independence.

9. Home care or long-term care costs

Seniors in need of funds for home care or long-term care expenses for a spouse may be able to turn to a reverse mortgage to cover these costs without depleting their savings.

10. Need to increase monthly cash flow

Many seniors struggle to meet their daily expenses. A reverse mortgage can be an excellent solution for improving monthly cash flow and ensuring a more comfortable retirement.

As a mortgage broker, I can help you make an informed financial decision about a reverse mortgage. It's crucial to complete a thorough assessment and obtain personalized advice to ensure a reverse mortgage is the right choice for your individual unique circumstances.

If you would like to discuss whether a reverse mortgage might be a viable option for you, please email me at [email protected] or you can set a time for a chat here on my calendar at www.calendly.com/april-dunn

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