Reverse Mortgages Explained


Canadian seniors save up their whole lives in order to purchase homes, raise children and eventually retire. Despite having money in RRSPs, saving accounts and other financial investments, seniors can often have a difficult time making ends meet each month. Worrying about money is stressful, and Canadian senior’s benefits only provide a minimum amount each month. Seniors who are living in their own beloved homes often have to consider selling their homes in order to live acceptable lifestyles. As more baby boomers are reaching retirement age, a solution to monthly money troubles that is increasing in popularity is reverse mortgages.

In the simplest terms, reverse mortgages are the opposite of traditional mortgages: instead of making monthly payments, monthly payments are made to the home owner. This gives seniors the ability to unlock the value of their homes and turn it into cash which can be used to make purchases or simply add to the monthly budget. The average individual has 77% of their net worth tied up in home equity. With the help of reverse mortgages, this equity can be used to make purchases or help with bills or buying groceries. Tapping into the value of their home allows seniors to have greater financial freedom and help relieve financial stress.

Seniors who own homes are eligible for reverse mortgages without credit or medical checks. Traditional loan methods often take into account income, credit score and a number of other factors making it difficult for older adults to qualify. Reverse mortgages allow home owners to take advantage of the accumulated value in their homes instead of having to take out additional loans. Seniors who are house-rich but cash-poor are easily able to qualify and turn the value of their homes into cash.

The beauty of reverse mortgages is that it gives individuals financial flexibility and financial freedom. The monthly payments paid to the senior can be used for things that have to be done such as home maintenance and home improvements. Seniors can stay in their homes and maintain the lifestyle they want without having to worry about added financial stress or paying back their loans until they choose to move or sell their homes. Instead of having to consider selling their homes, seniors are able to get reverse mortgages which will allow them to live the lifestyle they want while living in their own homes.

Reverse mortgages are not for everyone, but can be a phenomenal way to take advantage of the value of your home. As a senior living on a fixed income, it can be difficult to maintain a satisfying quality of living. Financial stress is an incredible burden that no one wants to deal with after years of saving for retirement. If you are a mature home owner who would like to tap into the equity of your home to help with monthly purchases or increase the quality of your life, do not hesitate to contact an agent to find out if reverse mortgages are a right fit for you.