A reverse mortgage is a home loan for individuals or couples 55+ years or older. You borrow from the value of your home and does not require monthly mortgage payments. However, interest is added to the loan’s balance and if no payments are made the interest can eventually exceed the value of the home. Reverse mortgages are risky and you need legal advice before considering this even as an option.
Advertising makes a reverse mortgage sound attractive because they push 4 points of interest:
1. You don’t have a monthly payment until you move.
2. You can receive a lump sum of money if you’ve paid off your home—sometimes 50% of the value of your home.
3. If you are house poor, you have extra cash money—you can use the money for healthcare needs or home repair and living expenses.
4. Tax-free source of income
However…
Interest on the reverse mortgage increases which in turn decreases the equity you have in your home. The interest can sometimes increase to more than the house is worth and there are higher interest rates than most mortgages.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
Are you concerned about CRA deadlines for filing and paying income tax? There have been several Government of Canada news updates regarding income tax for
What is the Canada Emergency Response Benefit (CERB)? This is a federal financial aid option to help business owners, employees, and self-employed get much-needed financial
The government of Canada is taking action in order to provide assistance and flexibility to Canadians facing hardship due to the Covid-19 virus. Not only