How some Canadians used reverse mortgages in 2024 to achieve their goals

Using reverse mortgages

I thought it might be interesting to take a look at how my reverse mortgage clients used reverse mortgages last year because reverse mortgages continue to be a powerful financial tool for many of my clients who are aged 55 and older.

They leveraged their home equity to enhance their lifestyle, support family and secure financial freedom without the burden of monthly mortgage payments.

Here are some of the most impactful ways my clients used a reverse mortgage to achieve their goals.

1. Living inheritance and estate planning

A growing number of homeowners used a reverse mortgage to provide financial assistance to their children and grandchildren, effectively creating generational wealth. By accessing home equity now, they were able to help with education costs, home down payments, or investments, all while retaining ownership of their homes.

2. Debt elimination

One of the most popular uses of a reverse mortgage was eliminating debt. Clients used their funds to pay off existing mortgages, lines of credit, and high-interest credit card balances, allowing them to enjoy a stress-free retirement without monthly debt obligations.

3. Aging in place

Many came to me as they wanted to stay in their homes for as long as possible by using a reverse mortgage to finance renovations and home modifications. Whether upgrading bathrooms for accessibility, installing stair lifts, or improving insulation and heating, these renovations made aging in place more comfortable and sustainable.

4. Maximizing home sale value

For those looking to sell, a reverse mortgage provided an opportunity to update and modernize their properties before listing. These improvements resulted in higher sale prices and, thanks to an open reverse mortgage option, they could sell without worrying about prepayment penalties.

5. Right-sizing

Many clients used reverse mortgages to purchase homes better suited to their lifestyle and needs. Interestingly, many chose to upsize, moving into larger homes that offered more comfort and space for entertaining family and friends—all without taking on monthly mortgage payments.

6. Generating rental income

Some homeowners used reverse mortgage funds to create rental suites within their homes. These renovations provided them with a new stream of supplemental income, improving financial stability while maximizing the use of their property.

7. Funding care and support

As healthcare costs continue to rise, some homeowners used their reverse mortgage proceeds to hire caregivers, housekeepers, or support personnel. Others funded in-home healthcare services, ensuring they could remain in their homes comfortably and independently for longer.

8. Bridge financing

In a fluctuating real estate market, a reverse mortgage served as an excellent bridge financing solution. Clients used an open reverse mortgage to access funds while transitioning between selling an existing home and purchasing a new one, giving them financial flexibility without pressure to sell quickly.

9. Purchasing new properties

Some clients leveraged their home equity to invest in rental properties or vacation homes. This strategic use of reverse mortgage funds allowed them to generate income or enjoy a second home for personal retreats and family getaways.

10. Travel adventures

Finally, many homeowners fulfilled lifelong travel dreams by accessing their home equity. Whether it was visiting their homeland, taking luxury cruises, or spending winters in sunny destinations, reverse mortgages helped turn these travel goals into reality.

Reverse mortgages provided my clients with financial freedom and flexibility in 2024. Whether eliminating debt, supporting family, or enhancing their quality of life, these strategic uses showcase how home equity can be an invaluable retirement asset.

If you're considering a reverse mortgage, consult with an experience mortgage broker to explore how it can help you achieve your own financial goals.

Please reach out to me at [email protected] if you have questions or you can book a time for a chat here on my calendar and I’m happy to spend some time with you to see if this might be a suitable option for you. 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.

What to do if you are facing foreclosure on your home

Dealing with foreclosure

Facing foreclosure can be an incredibly stressful and overwhelming experience.

If you have found yourself in any of the following situations, you may be at risk:

• You are about to miss a mortgage payment because you don’t have the funds to pay.

• You have missed one or two mortgage payments.

• You have received a notice or demand letter from your mortgage lender.

• You have been served a Petition for Foreclosure.

If any of those apply to you, it is a serious situation and you may be on your way to foreclosure. However, you do have options and the sooner you take action, the better your chances of finding a solution.

Why ignoring the situation is the worst thing you can do

It may be tempting to ignore phone calls from your lender or avoid opening the demand letter they’ve sent, but this approach will only make matters worse. Here are some potential consequences of inaction:

• You won’t have any say in the court proceedings and they will move forward without you.

• If your home is sold, you will receive little, if any, notice that you must vacate the property.

• You may have significantly less time to stay in your home than if you had appeared in court and explored alternative solutions.

How a mortgage broker can help

One of the best steps you can take when facing foreclosure is to speak with a mortgage broker as soon as possible. A mortgage broker has the expertise and industry connections to help you explore solutions that might not be immediately obvious. Here’s how they can assist:

1. Refinancing to lower your monthly payments

If your financial difficulty is temporary, refinancing your mortgage might be a viable option. A mortgage broker can help you find lenders who are willing to offer a lower interest rate or extend the amortization period, reducing your monthly payments to a more manageable level. This could help you avoid default and keep your home.

2. Securing a new mortgage with a different lender

If your current lender is unwilling to negotiate or offer a feasible solution, a mortgage broker can explore alternative lenders who may be willing to provide you with a new mortgage to pay off the existing one. This can be particularly helpful if your credit is still in decent shape and your home has equity.

3. Assessing the viability of selling your home

If keeping your home isn’t a realistic option, a mortgage broker can help you determine whether selling the property yourself is a better financial decision. If your home has enough equity, selling on your own terms may allow you to pay off the mortgage and avoid the negative financial consequences of foreclosure. This could also preserve your credit rating and make future homeownership possible.

4. Advising on legal and court proceedings

In some cases, going to court may be the best option to delay foreclosure and explore further solutions. While a mortgage broker is not a lawyer, they can work alongside legal professionals to ensure you have all the financial information you need to make informed decisions about your case.

Act early to prevent escalation

If you fall behind on your mortgage, interest and legal costs can accumulate quickly, making it even harder to catch up. The earlier you seek assistance, the more options you’ll have. A mortgage broker can guide you through this process, helping you navigate your financial challenges and find a solution that works best for you.

If you’re struggling with your mortgage, don’t wait—reach out today to explore your options and regain control of your financial future.

You can reach me at [email protected] or set a time for a chat here on my calendar 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.

Important to look beyond the interest rate when getting a mortgage

Beyond the rate

Mortgage consolidation can help reduce costs and lower payments

Consolidating debt

Now is the perfect time to take a closer look at your financial situation and explore ways to reduce your borrowing costs.

If you're juggling high-interest credit card balances, car loans or personal loans, it can feel overwhelming to stay on top of multiple payments. Fortunately, if you’re a homeowner with sufficient equity in your property, consolidating your debt into your mortgage could be a smart move.

Five key benefits of debt consolidation

Lower interest costs – Refinancing your mortgage to consolidate high-interest debts can significantly reduce the amount of interest you pay over time. By securing a lower rate, you keep more money in your pocket.

Simplified payments – Instead of managing multiple due dates and varying interest rates, debt consolidation streamlines everything into one predictable monthly payment, making budgeting easier.

Improved cash flow – Reducing your overall monthly payment frees up funds for savings, investments, or other essential expenses, helping you regain control of your financial future.

Reduced stress – Late payments and mounting debt can be a major source of anxiety. Consolidation eliminates the hassle of multiple bills and helps you stay on track.

Potential credit score improvement – Making consistent, on-time payments is one of the best ways to boost your credit score. By consolidating debt into a structured payment plan, you can work toward better financial health.

Real-life example: How debt consolidation saved a homeowner $850 per month

A homeowner with a mortgage balance of $250,000 at 3.5% interest (25-year amortization) and carrying high-interest debt:

• Credit card debt: $25,000 at 19.99% interest

• Car loan: $30,000 at 8.5% interest (five-year term)

• Personal loan: $15,000 at 12.5% interest (five-year term)

Total monthly payments: $3,150

Refinancing the mortgage to consolidate debt

After reviewing their finances, we refinanced their mortgage to include their high-interest debts and the new mortgage amount was $320,000 ($250,000 existing mortgage plus $70,000 debt consolidation)

• New interest rate: 5% (current market rate)

• New amortization period: 25 years

• New monthly mortgage payment: $1,860

Savings Breakdown

Before consolidation, the total monthly payments were:

• Mortgage: $1,250

• Credit card: $500

• Car Loan: $615

• Personal loan: $785

Total: $3,150 per month

After refinancing, the new mortgage payment was $1,860, it lead to a monthly savings of $1,290. Even factoring in a potential increase in the mortgage rate from 3.5% to 5%, the homeowner was saving $850 per month.

Choosing the right debt consolidation strategy starts with understanding your options. If you’d like a personalized, confidential assessment of your financial situation, email [email protected] or schedule a call at calendly.com/april-dunn.

Let’s find the best path to financial peace of mind together.

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