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Mortgage-Matters

The lowdown on reverse mortgages

What is a reverse mortgage?

A reverse mortgage is a way for homeowners 55 or older to turn up to 55% of the value of their home
into tax-free cash.

It’s a loan secured against the value of the home, but unlike a traditional home equity line of credit or a
conventional mortgage it does not require monthly mortgage payments for as long as you live in your
home.

What can you do with a reverse mortgage?

  • Pay off debts
  • Renovate or make your home more accessible
  • Handle unexpected expenses
  • Help your children or grandchildren
  • Improve your day-to-day standard of living
  • Make a special trip or purchase
  • Purchase a new home

Reverse mortgages have come a long way. They have evolved from a needs-based product to a solution
that many financial planners recommend as an important component of a comprehensive retirement
plan.

Unfortunately, there are still many misconceptions regarding reverse mortgages. Below, the myths are
separated from the facts.

Myth: The bank owns the home.

Fact: You always maintain title ownership and control of your home, and you have the freedom to
decide when and if you’d like to move or sell.

Myth: You will owe more than your home is worth.

Fact: Clients can qualify for up to 55% of the appraised value of the home, 33% on average. As the
lender has conservative lending practices, you can be confident that there will be equity left in the home
when the loan is repaid. In fact, over 99% of Reverse Mortgage clients have equity remaining in the
home when the loan is repaid.

Myth: A reverse mortgage is a solution of last resort.

Fact: Many financial professionals recommend a reverse mortgage because it’s a great way to provide
financial flexibility. Since it is tax-free money, it allows retirement savings to last longer.

Myth: You cannot get a reverse mortgage if you have an existing mortgage.

Fact: Many clients use a reverse mortgage to pay off their existing mortgage and other debts, freeing up
cash flow for you to use as you wish. How great would it feel to be free of regular mortgage payments?
It is also important to know these two key points.

  • You will remain the owner of your home and will never be asked to move or sell your home
  • provided you pay your property taxes and home insurance and keep your property well
  • maintained.
  • A reverse mortgage WIIL NOT affect any government benefits you may receive such as OAS, CPP
  • or GIS.

A no obligation assessment is available to determine if a reverse mortgage is a suitable option for you.

As a mortgage broker my advice is impartial and I will assist you to review all of the mortgage options
available to you. I am a Certified Reverse Mortgage Expert so I can confidentially review the pros and
cons for your individual situation.

It only takes about 90 seconds for the assessment so please give me a call at 1-888-561-2679 or email
[email protected]

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



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About the Author

April Dunn is the owner and a Mortgage Broker with The Red Door Mortgage Group – Mortgage Architects. She has been assisting clients to purchase, refinance or renew their mortgages for over 20 years.

April has experience as a Credit Union manager, a Residential Mortgage Manager with a large financial institution and as a licensed Mortgage Broker. By specializing in Strategic Mortgage Planning she has the tools available to build a customized mortgage plan, with the features and options that meet your needs.

April provides a full range of residential and commercial mortgage financing options for clients all over the province of British Columbia and across Canada through the Mortgage Architects network.

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

Website:  www.reddoormortgage.com



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

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