Reverse Mortgage Myths
Dispelling the myths and misconceptions about Canadian Reverse Mortgages
Myth #1: The bank will own my home
Fact: You will always retain full ownership of your home. The homeowner always maintains title ownership and control of their home, and they have the freedom to decide when and if they’d like to move or sell.
Myth #2: At the end of it I’ll owe more than my home is worth.
Fact: HomEquity Bank’s conservative lending practices allow clients to take a maximum of 55% (33% on average) of the home’s appraised value. In fact, 99% of HomEquity Bank’s clients have equity remaining in the home when the loan is repaid.
Myth #3: Reverse Mortgages are too expensive because of high interest rates.
Fact: HomEquity Bank rates are modestly higher than regular mortgages because there are no payments required.
Myth #4: I should only consider a Reverse Mortgage as a “last resort” option.
Fact: Many financial professionals recommend a reverse mortgage because it’s a great way to provide financial flexibility. Since it’s tax-free money, it allows retirement savings to last longer.
Myth #5: A Home Equity Line of Credit (HELOC) is a better option.
Fact: HELOCs are a good short-term borrowing option for people who can pay the interest and loan in the near future. However, HELOCs are callable loans and there exists significant risk of non-renewal or cancellation.
In comparison, a reverse mortgage is a long-term financial solution that won’t be called based on economic changes such as interest rates increasing, property values decreasing, or a change in the homeowner’s income. Also, money from a reverse mortgage provides the ability to prolong retirement savings.
Myth #6: The bank can force me to sell or foreclose at any time
Fact: A reverse mortgage is a lifetime product, and as long as property taxes and insurance are in good standing, the property remains in good condition, and the homeowner is living in the home, the loan won’t be called even if the house decreases in value. Reverse mortgages provide peace-of-mind that the homeowner can stay in their home as long as they’d like.
Myth #7: I cannot get a Reverse Mortgage if I have an existing mortgage.
Fact: Many of our clients use a reverse mortgage to pay off their existing mortgage and debts, freeing up cash flow for other things.
Myth #8: The surviving spouse will be stuck paying the loan after the homeowner passes away
Fact: Surviving spouses can choose to remain in the home without having to make a payment unless they choose to sell the home.
CRMC is a team of knowledgable, compassionate, licensed mortgage advisors, specializing in helping Canadians finance their retirement with a CHIP reverse mortgage from HomEquity Bank.
As a trusted partner of CHIP and HomEquity bank, our primary goal is to help educate and inform clients on the advantages of reverse mortgages, and help decide if it's the best financial solution for them at this time in their lives.
Get In Touch
Canada Reverse Mortgage Centre
54 Vansittart Avenue