1. Will I owe more than my home is worth?

The homeowner keeps all the equity remaining in the home. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid. The equity remaining depends on the amount borrowed, the value of the home, and the amount of time that’s passed since the reverse mortgage was taken out.

2. Will the bank own my home?

No. The homeowner retains title and maintains ownership of the home. It’s required for the homeowner to live in the home, pay taxes on time, have home insurance, and maintain the property in good condition.

3. What if I have an existing mortgage?

For clients that have an existing mortgage, the first step we will take is to pay off your conventional mortgage along with any other secured debt.

4. Should reverse mortgages only be considered as a loan of last resort?

No. Many financial professionals recommend a reverse mortgage to supplement monthly income instead of selling and downsizing, or taking out a conventional mortgage or a line of credit.

5. What fees are associated with a reverse mortgage?

There are one time fees to arrange a reverse mortgage such as an appraisal fee, fee for independent legal advice as well as a small fee for administration, title insurance, and registration. With the exception of the appraisal fee, these fees are paid for with the funding dollars.

6. What if I can’t afford payments?

There are no monthly payments required as long as the homeowner is living in the home.

7. Can I pay the mortgage off early?

Each year the borrower is allowed to pre-pay up to 10% of the outstanding balance without penalty. If more than that is pre-paid, the penalty depends on how long the mortgage has been outstanding: 1st year 5%; 2nd year 4%; 3rd year 3% and thereafter 3 months interest. If the borrower moves to an assisted living facility the pre-payment penalty is cut in half. If the borrower passes away there is no pre-payment penalty.

8. Will this affect my CPP or OAS?

No. A Reverse Mortgage is a loan, not income, even if it is advanced monthly. Your pension or OAS will not be affected, and no income tax is payable on the monies you receive.