Reverse mortgages allow you to have the cash in hand without selling your house. This type of mortgage is secured by a residential property. You could access the equity that is accumulated through the years. The borrower is responsible for property tax and home insurance. This type of mortgage does not require monthly mortgage payments. The option to pay back the interest and principal at any time, which the fee is indicated in the terms and conditions. The mortgage could be paid once the house is sold by the borrower or estate.
In Canada the borrowers should be at least 55 years old and own the property and reside there for six months of year at the place. The reverse mortgage pays any existing mortgage or lien on the property. The property condition, location, or balance of the mortgage are important factors for lenders to consider if to lend funds or approve the mortgage. The cost of borrowing could be rolled into the loan itself. If there is more than one person on the title of your house, both must be listed on the reverse mortgage application and must be 55 years old.
Once you take the reverse Mortgage, you need to pay your existing mortgage or any home equity line of credit You could choose how to receive money from a reverse mortgage by One-time lump sum or withdraw the amount over time. The borrowers will pay for legal fees, closing costs, home appraisal fees and setup fees The interest charge on a reverse mortgage is added to the original loan amount.
You don’t pay tax on the Money you receive, which would not affect the old-age Security or other benefits that you might be getting.
It is recommended to receive independent legal advice before you get a reverse mortgage.