A reverse mortgage is a loan secured against the appraised value of your home. It is designed exclusively for Canadian homeowners aged 55 years and older. This enables you to convert up to 55% of your home’s value into tax-free cash while staying in your home. You don’t have to make any regular mortgage payments or pay back the loan until you move or sell.
Millennials, let’s touch on how this is an advantage for you.
Reverse mortgages can be used
for a down payment on a new home or an additional property, similar to an early inheritance. Your parents (or whoever is taking out the reverse mortgage) will not need to make any payments on this money-making it an appealing option on how to secure a down payment.
Fees & additional costs associated with a Reverse Mortgage:
The costs will vary depending on the type of reverse mortgage you take
Some major benefits of reverse mortgages include:
•You only repay when you move or sell your home
•You have financial flexibility in how you receive the funds
•The money received from a Reverse Mortgage is tax-free and requires no monthly mortgage payments
•The money can be used however the homeowner chooses