Protection Of Home Ownership With A Canadian Reverse Mortgage
Q: Who owns my home?
A. With a Canadian Reverse Mortgage, title to the home remains in your name and you may continue to enjoy all the benefits of home ownership. Your home ownership is never at risk and at no time will you be asked to move or sell your home to repay the loan. When you pass away, the home becomes a part of the estate as it normally would and the mortgage and interest are repaid by whatever means the heirs choose.
Q: Can I my sell my home and move?
A. Yes. At any time you are free to sell the home and move. Once the home is sold, the Reverse Mortgage becomes due; however, you may be able to transfer your Reverse Mortgage to the new home. The Canadian Reverse Mortgage would also become due if the homeowners move out of the home.
Q: Can I rent out my home?
A. Yes. Although a Reverse Mortgage is not designed for rental properties, it does provide the flexibility for you to rent the home for short periods of time.
Q: What if my home goes down in value?
A. Repayment of a Canadian Reverse Mortgage (principal plus interest) 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 your home is not enough to repay the Reverse Mortgage in full, we will limit repayment to the amount received from the sale of your home. No other assets in the estate will be touched. If the proceeds from the sale of your home exceed the balance on the loan, the estate retains the surplus.
Q: What happens when we were to pass away?
A. In the case of a couple, when one spouse passes, nothing changes. Upon the passing of the surviving partner, the home becomes part of the estate in the usual manner, and the estate repays the initial mortgage and accrued interest as it would repay any other outstanding debts. If the client is a single homeowner, the home becomes part of the estate when they pass away, and the full amount of principal and accrued interest is paid by the estate. In addition, a Reverse Mortgage can be repaid from other funds if the heirs do not wish to sell the home.
Q: Can I still leave my home to my heirs?
A. The home continues to remain an asset in the estate. However, the beneficiary then becomes responsible for repaying the full amount of principal and interest left due on the Reverse Mortgage. A Reverse Mortgage can be repaid from other funds in the estate, or by a conventional mortgage or other type of loan, or by any other means the heirs choose.