Asked And Answered:
Q: What is a reverse mortgage?
A: A reverse mortgage is a loan that is secured by the equity in your home. It is specifically designed for homeowners that are age 55 or older, and are looking to receive up to 50% of their homes value. The major difference with are reverse mortgage is that you do not have to make any payments (interest or principal) for as long as you or your spouse live in your home.
Q: Are there limits to how I can use my proceeds from the reverse mortgage?
A: No. You can use the proceeds any way you wish. The only condition is that any outstanding loans secured by your home must be payed out or postponed from the proceeds you receive from the reverse mortgage.
Q: If I have currently have a mortgage can I still get a reverse mortgage?
A: Absolutely. The reverse mortgage can be used to pay off any mortgages from the proceeds at closing.
Q: Does my spouse and I have to be age 55 or older?
A: Yes. Both you and your spouse need to be at least age 55 to qualify for a reverse mortgage.
Q: How do I know if my home qualifies for a reverse mortgage?
A: Call us Toll Free at 1-800-550-1255 and one of our Reverse Mortgage Experts will find out if your home qualifies.
Q: What if my home goes down in value?
A: Repayment of the reverse mortgages is guaranteed not to exceed the fair market value of your home, and you will never be asked to sell your home to repay the reverse mortgage.
Q: Will the money I receive from the reverse mortgage increase my taxable income?
A: Currently, the CRA treats money from a reverse mortgage to be loan advances and not taxable income. This means that it will not affect your Old Age Security (OAS) or Guaranteed Income Supplement (GIS) government benefits you may receive.
Q: Does the money from the reverse mortgage affect my Old Age Security (OAS) or Guaranteed Income Supplement (GIS)?
A: No, the money you receive from the reverse mortgage is not considered taxable income.
Q: Are there any upfront out-of-pocket expenses associated with setting up a reverse mortgage?
A: Yes. There is the cost to have an appraiser determine the market value of your home which is typically $175 – $400, and the cost for your Independent Legal Advice, which can typically range from $300 to $600.
Q: Will I ever owe more than my home is worth?
A: No. Repayment of the reverse mortgage is guaranteed not to exceed the fair market value of your home at the time it is sold. In the event that the fair market selling price of the home is not enough to repay the reverse mortgage in full, the reverse mortgage lender will limit repayment to the amount received from the sale of the home. No other assets in the estate will be touched. If the proceeds from the sale of the home exceed the balance on the loan, the estate retains the surplus.
Q: Will I maintain maintain ownership of my home?
A: Yes. The title to your home will remain in your name, and the reverse mortgage lender will only be registering a mortgage against it.
Q: I know do not need to make any mortgage payments under a reverse mortgage, but what are responsibilities as a homeowner?
A: You will still be responsible for maintaining your home, paying property taxes, and paying for home insurance coverage.
Q: How long will it take to get the money?
A: You will receive your money within approximately 2-5 days from the time the legal advisor forwards the reverse mortgage contract to the lender.