May retirees are living with the reality that they just haven’t saved up enough money to live the lifestyle that they would like to live in their later years. Perhaps they wish they could travel more or finally buy that red convertible that they’ve dreamed of owning since they were a kid, but between inflation and life’s unexpected events, the savings simply aren’t there. 

If you own your own home however, one solution may be to get a reverse mortgage. If you are wondering if a reverse mortgage is right for you, then keep reading. 

What is a reverse mortgage?

A reverse mortgage is a specific type of loan which uses the equity in your home as collateral in order to provide you with the money you need. This type of mortgage is only available for those who are over the age of 55 and it is something that you can receive either in a large lump sum, a monthly installment (think of it like an extra pension check!), or a combination of the two. 

When you get a reverse mortgage, you still own your home and as long as you or your spouse are living in your home, you don’t have to pay back any of the money. The money only has to be repaid after you pass away (in which case it is repaid out of your estate) or when you and your spouse move out. 

And of course, should you happen to have a windfall, you can choose to pay off the reverse mortgage at any time. 

What are the benefits of a reverse mortgage? 

Getting a reverse mortgage allows you to supplement your retirement income and to live a more comfortable lifestyle. Many Canadians have difficulty saving up enough money during their working years to give them the kind of retirement that they wish to have. 

A reverse mortgage helps retires not only have the kind of retirement lifestyle that they want, but it also means that they don’t have to turn to their families for financial support. 

What are the disadvantages of a reverse mortgage? 

While getting a reverse mortgage has many benefits, there are still a few disadvantages you need to be aware of before you make your decision. 

One of the main drawbacks is that reverse mortgages tend to have higher interest rates than other loans. You do not have to pay back the loan while you are living in your home, but the interest charges still accumulate. This means that a reverse mortgage has the potential to take a fairly large bite out of your estate after you pass away. 

This factor should be weighed against the benefit of not having to turn to your family for support while you are living. 

Contact Sure Loan today

If you are over the age of 55 and own your own home, a reverse mortgage can help to give you the lifestyle that you would like to enjoy. It is important however to know both the pros and the cons of this type of loan. If you would like to learn more, or if you are ready to apply for a reverse mortgage we can help. Give us a call today to speak to one of our brokers. 

Posted in Mortgage Service and tagged , , , , , ,