Many Reasons to Consider Refinancing
Lower your payment, remove mortgage insurance, or do home improvement projects. Let a Win Lui Group Mortgage Professional guide you through every stage of your journey.
Many Reasons to Consider Refinancing
Lower your payment, remove mortgage insurance, or do home improvement projects. Let a Win Lui Group Mortgage Professional guide you through every stage of your journey.
Many Reasons to Consider Refinancing
Lower your payment, remove mortgage insurance, or do home improvement projects. Let a Win Lui Group Mortgage Professional guide you through every stage of your journey.
Refinancing
Ask a Win Lui Group Mortgage Professional if refinancing is right for you!
If you find yourself experiencing a financial emergency, or are wanting to improve your financial situation, mortgage refinancing might be the way to go!
Overview
Life happens. Whether you are facing financial emergency, wanting to improve your financial situation, put more into your investment portfolio or simply wanting to spoil yourself with a long overdue trip, mortgage refinancing can be the answer – when done properly!
Refinancing
Ask a Win Lui Group Mortgage Professional if refinancing is right for you!
If you find yourself experiencing a financial emergency, or are wanting to improve your financial situation, mortgage refinancing might be the way to go!
Overview
Life happens. Whether you are facing financial emergency, wanting to improve your financial situation, put more into your investment portfolio or simply wanting to spoil yourself with a long overdue trip, mortgage refinancing can be the answer – when done properly!
Refinancing
Ask a Win Lui Group Mortgage Professional if refinancing is right for you!
If you find yourself experiencing a financial emergency, or are wanting to improve your financial situation, mortgage refinancing might be the way to go!
Overview
Life happens. Whether you are facing financial emergency, wanting to improve your financial situation, put more into your investment portfolio or simply wanting to spoil yourself with a long overdue trip, mortgage refinancing can be the answer – when done properly!
Refinancing
Ask a Win Lui Group Mortgage Professional if refinancing is right for you!
If you find yourself experiencing a financial emergency, or are wanting to improve your financial situation, mortgage refinancing might be the way to go!
Overview
Life happens. Whether you are facing financial emergency, wanting to improve your financial situation, put more into your investment portfolio or simply wanting to spoil yourself with a long overdue trip, mortgage refinancing can be the answer – when done properly!
What is Mortgage Financing?
Refinancing your mortgage refers to the process of renegotiating your current mortgage agreement for a variety of reasons. Essentially, refinancing allows you to pay off your existing mortgage and replace it with a new one.
There are a variety of reasons to consider mortgage refinancing, including but not limited to:
- You want to leverage large increases in property value
- You want to get equity out of the home for upgrades or renovations
- You want to expand your investment portfolio
- You are looking to consolidate your debt
- You have kids headed off to college
- You are going through a divorce
- You want a better interest rate
- You want to convert your mortgage from fixed to variable (or vice-versa)
Benefits of Refinancing
Mortgage refinancing can result in a host of great benefits, such as reducing financial stress and helping get you back on track for your financial future! Some of the larger benefits include:
ACCESS A LOWER INTEREST RATE
As mentioned above, one reason to refinance your mortgage is to get a better rate – this is especially true when done through a mortgage professional. On average, a Win Lui Group mortgage professional has access to over 90 lenders! This allows them to find the best mortgage product for your unique needs, versus traditional banks that only have access to their own mortgage offerings. Plus, using a mortgage expert allows you to benefit from their advice at typically zero cost to you.
CONSOLIDATING YOUR DEBT
There are many different types of debt from credit cards and lines of credit to school loans and mortgages. But, did you know that most types of consumer debt have much higher interest rates than those you would pay on a mortgage? Refinancing can free up cash to help you pay out these debts. While it may increase your mortgage, your overall payments could be far lower and would be a single payment versus multiple sources. Keep in mind, you need at least 20 percent equity in your home to qualify.
MODIFYING YOUR MORTGAGE
Life is that it is ever-changing and sometimes you need to pay off your mortgage faster or change your mortgage type. Maybe you came into some extra money and want to put it towards your mortgage or maybe you are weary of the market and want to lock in at a fixed-rate for security. Always be sure to talk to your mortgage professional about potential penalties.
UTILIZING YOUR HOME EQUITY
One of the biggest reasons to buy in the first place is to build up equity in your home. Consider your home equity as the difference between your property’s market value and the balance of your mortgage. If you need funds, you can refinance your mortgage to access up to 80% of your home’s appraised value!
Refinancing Considerations
As with everything, refinancing comes at a price! If you are experiencing a financial rough-patch or one of the previously mentioned situations and think that refinancing your mortgage could be the right solution, there are a few things to know.
The first and most important thing to understand about mortgage refinancing is that if you opt to refinance during your term, it is considered to be breaking your mortgage agreement. As with any contract, there are associated penalties for breaking them and it could end up being quite costly. If at all possible, it is always best to wait until the end of the mortgage term before any refinancing is conducted.
Beyond the penalties, there are a few additional things to know about mortgage refinancing such as:
- It allows you to tap into 80 percent of the value of your home.
- It requires re-qualification under the current rates and rules, which includes passing the “stress test” again
- No default insurance is required, which could give you more lender options
- There is typically an appraisal cost and legal fees for the new mortgage agreement
Talking to a Mortgage Professional about refinancing can provide you access to even greater rates and mortgage plans to best suit your needs and what you are trying to accomplish through your refinancing strategy. The best part? Their services won’t cost you a penny. Why wait? Contact a Win Lui Group Mortgage Professional in your area today.
What is Mortgage Financing?
Refinancing your mortgage refers to the process of renegotiating your current mortgage agreement for a variety of reasons. Essentially, refinancing allows you to pay off your existing mortgage and replace it with a new one.
There are a variety of reasons to consider mortgage refinancing, including but not limited to:
- You want to leverage large increases in property value
- You want to get equity out of the home for upgrades or renovations
- You want to expand your investment portfolio
- You are looking to consolidate your debt
- You have kids headed off to college
- You are going through a divorce
- You want a better interest rate
- You want to convert your mortgage from fixed to variable (or vice-versa)
Benefits of Refinancing
Mortgage refinancing can result in a host of great benefits, such as reducing financial stress and helping get you back on track for your financial future! Some of the larger benefits include:
ACCESS A LOWER INTEREST RATE
As mentioned above, one reason to refinance your mortgage is to get a better rate – this is especially true when done through a mortgage professional. On average, a Win Lui Group mortgage professional has access to over 90 lenders! This allows them to find the best mortgage product for your unique needs, versus traditional banks that only have access to their own mortgage offerings. Plus, using a mortgage expert allows you to benefit from their advice at typically zero cost to you.
CONSOLIDATING YOUR DEBT
There are many different types of debt from credit cards and lines of credit to school loans and mortgages. But, did you know that most types of consumer debt have much higher interest rates than those you would pay on a mortgage? Refinancing can free up cash to help you pay out these debts. While it may increase your mortgage, your overall payments could be far lower and would be a single payment versus multiple sources. Keep in mind, you need at least 20 percent equity in your home to qualify.
MODIFYING YOUR MORTGAGE
Life is that it is ever-changing and sometimes you need to pay off your mortgage faster or change your mortgage type. Maybe you came into some extra money and want to put it towards your mortgage or maybe you are weary of the market and want to lock in at a fixed-rate for security. Always be sure to talk to your mortgage professional about potential penalties.
UTILIZING YOUR HOME EQUITY
One of the biggest reasons to buy in the first place is to build up equity in your home. Consider your home equity as the difference between your property’s market value and the balance of your mortgage. If you need funds, you can refinance your mortgage to access up to 80% of your home’s appraised value!
Refinancing Considerations
As with everything, refinancing comes at a price! If you are experiencing a financial rough-patch or one of the previously mentioned situations and think that refinancing your mortgage could be the right solution, there are a few things to know.
The first and most important thing to understand about mortgage refinancing is that if you opt to refinance during your term, it is considered to be breaking your mortgage agreement. As with any contract, there are associated penalties for breaking them and it could end up being quite costly. If at all possible, it is always best to wait until the end of the mortgage term before any refinancing is conducted.
Beyond the penalties, there are a few additional things to know about mortgage refinancing such as:
- It allows you to tap into 80 percent of the value of your home.
- It requires re-qualification under the current rates and rules, which includes passing the “stress test” again
- No default insurance is required, which could give you more lender options
- There is typically an appraisal cost and legal fees for the new mortgage agreement
Talking to a Mortgage Professional about refinancing can provide you access to even greater rates and mortgage plans to best suit your needs and what you are trying to accomplish through your refinancing strategy. The best part? Their services won’t cost you a penny. Why wait? Contact a Win Lui Group Mortgage Professional in your area today.
What is Mortgage Financing?
Refinancing your mortgage refers to the process of renegotiating your current mortgage agreement for a variety of reasons. Essentially, refinancing allows you to pay off your existing mortgage and replace it with a new one.
There are a variety of reasons to consider mortgage refinancing, including but not limited to:
- You want to leverage large increases in property value
- You want to get equity out of the home for upgrades or renovations
- You want to expand your investment portfolio
- You are looking to consolidate your debt
- You have kids headed off to college
- You are going through a divorce
- You want a better interest rate
- You want to convert your mortgage from fixed to variable (or vice-versa)
Benefits of Refinancing
Mortgage refinancing can result in a host of great benefits, such as reducing financial stress and helping get you back on track for your financial future! Some of the larger benefits include:
ACCESS A LOWER INTEREST RATE
As mentioned above, one reason to refinance your mortgage is to get a better rate – this is especially true when done through a mortgage professional. On average, a Win Lui Group mortgage professional has access to over 90 lenders! This allows them to find the best mortgage product for your unique needs, versus traditional banks that only have access to their own mortgage offerings. Plus, using a mortgage expert allows you to benefit from their advice at typically zero cost to you.
CONSOLIDATING YOUR DEBT
There are many different types of debt from credit cards and lines of credit to school loans and mortgages. But, did you know that most types of consumer debt have much higher interest rates than those you would pay on a mortgage? Refinancing can free up cash to help you pay out these debts. While it may increase your mortgage, your overall payments could be far lower and would be a single payment versus multiple sources. Keep in mind, you need at least 20 percent equity in your home to qualify.
MODIFYING YOUR MORTGAGE
Life is that it is ever-changing and sometimes you need to pay off your mortgage faster or change your mortgage type. Maybe you came into some extra money and want to put it towards your mortgage or maybe you are weary of the market and want to lock in at a fixed-rate for security. Always be sure to talk to your mortgage professional about potential penalties.
UTILIZING YOUR HOME EQUITY
One of the biggest reasons to buy in the first place is to build up equity in your home. Consider your home equity as the difference between your property’s market value and the balance of your mortgage. If you need funds, you can refinance your mortgage to access up to 80% of your home’s appraised value!
Refinancing Considerations
As with everything, refinancing comes at a price! If you are experiencing a financial rough-patch or one of the previously mentioned situations and think that refinancing your mortgage could be the right solution, there are a few things to know.
The first and most important thing to understand about mortgage refinancing is that if you opt to refinance during your term, it is considered to be breaking your mortgage agreement. As with any contract, there are associated penalties for breaking them and it could end up being quite costly. If at all possible, it is always best to wait until the end of the mortgage term before any refinancing is conducted.
Beyond the penalties, there are a few additional things to know about mortgage refinancing such as:
- It allows you to tap into 80 percent of the value of your home.
- It requires re-qualification under the current rates and rules, which includes passing the “stress test” again
- No default insurance is required, which could give you more lender options
- There is typically an appraisal cost and legal fees for the new mortgage agreement
Talking to a Mortgage Professional about refinancing can provide you access to even greater rates and mortgage plans to best suit your needs and what you are trying to accomplish through your refinancing strategy. The best part? Their services won’t cost you a penny. Why wait? Contact a Win Lui Group Mortgage Professional in your area today.
Renew
Let a Win Lui Group Mortgage Professional help you find the best renewal rate!
If your mortgage is coming up for renewal, there are a few things to keep in mind to ensure that you are getting the best mortgage product to fit your life TODAY.
When it comes time to renew your mortgage, most lenders will send you a renewal letter when there is around 3 months remaining on your term. While nearly 60 percent of borrowers simply sign and send back their renewal without ever shopping around for a more favourable interest rate, this is actually the best time to check out your options.
Since your term is ending, this is a great time to shop the market or redo your mortgage WITHOUT PENALTY! If you have been wanting to switch your mortgage from fixed to variable-rate (or vice-versa), or want to move to a different lender or try for a lower rate, your DLC Mortgage Professional can help!
Do be advised, if you are considering switching lenders, you will need to inquire about any existing life insurance or other policies that you have, as this could be affected if you change lenders. You should also be aware that and NEW insurance could be more expensive as you are re-applying and your circumstances (age, health) will have changed since your initial mortgage term and insurance plan was signed.
A Win Lui Group Mortgage Professional can help answer all your refinancing questions – and more – as well as shop the market to find you a better rate! With access to over 90 lenders, they are able to quickly compare mortgage rates and products and help you make the switch!
Renew
Let a Win Lui Group Mortgage Professional help you find the best renewal rate!
If your mortgage is coming up for renewal, there are a few things to keep in mind to ensure that you are getting the best mortgage product to fit your life TODAY.
When it comes time to renew your mortgage, most lenders will send you a renewal letter when there is around 3 months remaining on your term. While nearly 60 percent of borrowers simply sign and send back their renewal without ever shopping around for a more favourable interest rate, this is actually the best time to check out your options.
Since your term is ending, this is a great time to shop the market or redo your mortgage WITHOUT PENALTY! If you have been wanting to switch your mortgage from fixed to variable-rate (or vice-versa), or want to move to a different lender or try for a lower rate, your DLC Mortgage Professional can help!
Do be advised, if you are considering switching lenders, you will need to inquire about any existing life insurance or other policies that you have, as this could be affected if you change lenders. You should also be aware that and NEW insurance could be more expensive as you are re-applying and your circumstances (age, health) will have changed since your initial mortgage term and insurance plan was signed.
A Win Lui Group Mortgage Professional can help answer all your refinancing questions – and more – as well as shop the market to find you a better rate! With access to over 90 lenders, they are able to quickly compare mortgage rates and products and help you make the switch!
Renew
Let a Win Lui Group Mortgage Professional help you find the best renewal rate!
If your mortgage is coming up for renewal, there are a few things to keep in mind to ensure that you are getting the best mortgage product to fit your life TODAY.
When it comes time to renew your mortgage, most lenders will send you a renewal letter when there is around 3 months remaining on your term. While nearly 60 percent of borrowers simply sign and send back their renewal without ever shopping around for a more favourable interest rate, this is actually the best time to check out your options.
Since your term is ending, this is a great time to shop the market or redo your mortgage WITHOUT PENALTY! If you have been wanting to switch your mortgage from fixed to variable-rate (or vice-versa), or want to move to a different lender or try for a lower rate, your DLC Mortgage Professional can help!
Do be advised, if you are considering switching lenders, you will need to inquire about any existing life insurance or other policies that you have, as this could be affected if you change lenders. You should also be aware that and NEW insurance could be more expensive as you are re-applying and your circumstances (age, health) will have changed since your initial mortgage term and insurance plan was signed.
A Win Lui Group Mortgage Professional can help answer all your refinancing questions – and more – as well as shop the market to find you a better rate! With access to over 90 lenders, they are able to quickly compare mortgage rates and products and help you make the switch!
Reverse Mortgage
A solution designed specifically to meet the needs of senior homeowners.
If you are looking to retire, or have aging parents who are currently facing high debt, ongoing expenses and slowed income, the reverse mortgage can help!
Overview
Reverse mortgages continue to gain popularity for Canadian homeowners aged 55 plus. One reason for the increased popularity of the reverse mortgage is simple necessity. Many retired Canadians are looking for options to increase their cash flow either by paying-out other debts, or by accessing cash to help with everyday life expenses. In addition, Canadians have a growing preference to remain in their homes for as long as possible. Doing so may require costly renovations and upkeep. Whatever your need, a reverse mortgage might be a great solution!
Reverse Mortgage
A solution designed specifically to meet the needs of senior homeowners.
If you are looking to retire, or have aging parents who are currently facing high debt, ongoing expenses and slowed income, the reverse mortgage can help!
Overview
Reverse mortgages continue to gain popularity for Canadian homeowners aged 55 plus. One reason for the increased popularity of the reverse mortgage is simple necessity. Many retired Canadians are looking for options to increase their cash flow either by paying-out other debts, or by accessing cash to help with everyday life expenses. In addition, Canadians have a growing preference to remain in their homes for as long as possible. Doing so may require costly renovations and upkeep. Whatever your need, a reverse mortgage might be a great solution!
Reverse Mortgage
A solution designed specifically to meet the needs of senior homeowners.
If you are looking to retire, or have aging parents who are currently facing high debt, ongoing expenses and slowed income, the reverse mortgage can help!
Overview
Reverse mortgages continue to gain popularity for Canadian homeowners aged 55 plus. One reason for the increased popularity of the reverse mortgage is simple necessity. Many retired Canadians are looking for options to increase their cash flow either by paying-out other debts, or by accessing cash to help with everyday life expenses. In addition, Canadians have a growing preference to remain in their homes for as long as possible. Doing so may require costly renovations and upkeep. Whatever your need, a reverse mortgage might be a great solution!
Reverse Mortgage
A solution designed specifically to meet the needs of senior homeowners.
If you are looking to retire, or have aging parents who are currently facing high debt, ongoing expenses and slowed income, the reverse mortgage can help!
Overview
Reverse mortgages continue to gain popularity for Canadian homeowners aged 55 plus. One reason for the increased popularity of the reverse mortgage is simple necessity. Many retired Canadians are looking for options to increase their cash flow either by paying-out other debts, or by accessing cash to help with everyday life expenses. In addition, Canadians have a growing preference to remain in their homes for as long as possible. Doing so may require costly renovations and upkeep. Whatever your need, a reverse mortgage might be a great solution!
Who Offers Reverse Mortgages in Canada?
There are two Canadian Schedule I banks that offer reverse mortgages: Equitable Bank and Home Equity Bank. Both banks’ reverse mortgage products are similar in their design and function. We can help you determine which is better suited to your needs.
What is a Reverse Mortgage?
Reverse mortgages are designed for Canadians who are 55 and older. The goal is to allow these individuals to tap into the equity of their home to assist in comfortable financial living. However, the difference is that once a reverse mortgage is in place, borrowers are not required to make regular payments. This provides access to a considerable inflow of cash, with the flexibility of optional payments. The only time payment will be required is when you sell or move out of your home.
The payout of the mortgage at this time would consist of the original principal balance, plus the accrued interest and any fees incurred since inception. Hence, it’s a reverse mortgage because you don’t make payments and the balance increases with the accrued interest, as opposed to reducing like a traditional mortgage. Fear not, the equity historically is still maintained or even grows as the appreciation value is generally higher than the interest accrual.
While the focus of a reverse mortgage is on older individuals, this is also a great option for individuals wanting to assist their elderly parents. Instead of selling and moving to a care home or assisted living, some individuals prefer to stay where they are familiar and instead opt for in-home care. A reverse mortgage is a terrific way to access the equity in the home, month by month, to pay for those care costs.
Reasons to Consider a Reverse Mortgage
Reverse mortgages are designed to allow you to access up to 55% of your home’s equity, thereby allowing you to convert your home equity into cash. This can be done as either a one-time lump sum payment, or you can choose to structure it to receive monthly payouts. The money received through a reverse mortgage can be used to pay off existing debts, gift money to family, expand qualify of life, add safety features to the home, or expand your investment portfolio.
You can also switch your existing mortgage dollar-for-dollar to eliminate payments and increase cash flow.
Benefits of a Reverse Mortgage
The benefits of a reverse mortgage don’t just stop at the ability to cash in on your home’s equity! In fact, these benefits also include:
- No monthly mortgage payments
- No income or credit qualifications
- Very low / little paperwork required
- Title and ownership of property remain in homeowner’s name
- Flexible options to break term early and to pay interest off monthly, if preferred
- Penalty waived in the event of death or care home placement to preserve the estate
If you think a reverse mortgage might be the right option for you or your parents, contact a Win Lui Group Mortgage Professional today to discuss your current situation and how this increasingly popular mortgage option can help.
Misconceptions about a Reverse Mortgage
With a Reverse Mortgage, You No Longer Own Your Home
FALSE. You always maintain title, ownership and control of your home. The reverse mortgage lender simply has a first mortgage on the title.
You Will Owe More Than the Value of Your Home
FALSE. Most reverse mortgages come with a “No Negative Equity Guarantee” the notes as long as the homeowner has met the required obligations, the amount you will have to pay on the due date will not exceed the fair market value of your home.
Reverse Mortgages are Expensive
FALSE. Much like a conventional mortgage, an appraisal of your property and independent legal advice is required for a reverse mortgage and will be similar to the costs you would incur on a regular payment mortgage. However, beyond this the only additional fees are a one-off closing and administration fee. When compared to the cost of moving to another home, the reverse mortgage is a much more affordable option.
Reverse Mortgages Have Higher Interest Rates
DEPENDS. While interest rates are typically a bit higher than a traditional mortgage, the difference is not excessive. In addition, it is important to remember that monthly mortgage payments are not a viable option for most retired Canadians. In addition, there are many who struggle to even qualify for a traditional mortgage. For these reasons, many retired Canadians are choosing reverse mortgages over conventional solutions.
You Can’t Pass on Your Home
FALSE. Another myth is that your children won’t be able to inherit your home if you utilize a reverse mortgage. This is not the case as your heirs will always have the option of keeping the property by paying off your reverse mortgage after you pass away. Plus, if you have a “No Negative Equity Guarantee” in your reverse mortgage contract, then if the mortgage amount due is more than the gross proceeds from the sale of the property, the lender will cover the difference between the sale price and the loan amount. Therefore, you will never owe more than the fair market value of the home.
Who Offers Reverse Mortgages in Canada?
There are two Canadian Schedule I banks that offer reverse mortgages: Equitable Bank and Home Equity Bank. Both banks’ reverse mortgage products are similar in their design and function. We can help you determine which is better suited to your needs.
What is a Reverse Mortgage?
Reverse mortgages are designed for Canadians who are 55 and older. The goal is to allow these individuals to tap into the equity of their home to assist in comfortable financial living. However, the difference is that once a reverse mortgage is in place, borrowers are not required to make regular payments. This provides access to a considerable inflow of cash, with the flexibility of optional payments. The only time payment will be required is when you sell or move out of your home.
The payout of the mortgage at this time would consist of the original principal balance, plus the accrued interest and any fees incurred since inception. Hence, it’s a reverse mortgage because you don’t make payments and the balance increases with the accrued interest, as opposed to reducing like a traditional mortgage. Fear not, the equity historically is still maintained or even grows as the appreciation value is generally higher than the interest accrual.
While the focus of a reverse mortgage is on older individuals, this is also a great option for individuals wanting to assist their elderly parents. Instead of selling and moving to a care home or assisted living, some individuals prefer to stay where they are familiar and instead opt for in-home care. A reverse mortgage is a terrific way to access the equity in the home, month by month, to pay for those care costs.
Reasons to Consider a Reverse Mortgage
Reverse mortgages are designed to allow you to access up to 55% of your home’s equity, thereby allowing you to convert your home equity into cash. This can be done as either a one-time lump sum payment, or you can choose to structure it to receive monthly payouts. The money received through a reverse mortgage can be used to pay off existing debts, gift money to family, expand qualify of life, add safety features to the home, or expand your investment portfolio.
You can also switch your existing mortgage dollar-for-dollar to eliminate payments and increase cash flow.
Benefits of a Reverse Mortgage
The benefits of a reverse mortgage don’t just stop at the ability to cash in on your home’s equity! In fact, these benefits also include:
- No monthly mortgage payments
- No income or credit qualifications
- Very low / little paperwork required
- Title and ownership of property remain in homeowner’s name
- Flexible options to break term early and to pay interest off monthly, if preferred
- Penalty waived in the event of death or care home placement to preserve the estate
If you think a reverse mortgage might be the right option for you or your parents, contact a Win Lui Group Mortgage Professional today to discuss your current situation and how this increasingly popular mortgage option can help.
Misconceptions about a Reverse Mortgage
With a Reverse Mortgage, You No Longer Own Your Home
FALSE. You always maintain title, ownership and control of your home. The reverse mortgage lender simply has a first mortgage on the title.
You Will Owe More Than the Value of Your Home
FALSE. Most reverse mortgages come with a “No Negative Equity Guarantee” the notes as long as the homeowner has met the required obligations, the amount you will have to pay on the due date will not exceed the fair market value of your home.
Reverse Mortgages are Expensive
FALSE. Much like a conventional mortgage, an appraisal of your property and independent legal advice is required for a reverse mortgage and will be similar to the costs you would incur on a regular payment mortgage. However, beyond this the only additional fees are a one-off closing and administration fee. When compared to the cost of moving to another home, the reverse mortgage is a much more affordable option.
Reverse Mortgages Have Higher Interest Rates
DEPENDS. While interest rates are typically a bit higher than a traditional mortgage, the difference is not excessive. In addition, it is important to remember that monthly mortgage payments are not a viable option for most retired Canadians. In addition, there are many who struggle to even qualify for a traditional mortgage. For these reasons, many retired Canadians are choosing reverse mortgages over conventional solutions.
You Can’t Pass on Your Home
FALSE. Another myth is that your children won’t be able to inherit your home if you utilize a reverse mortgage. This is not the case as your heirs will always have the option of keeping the property by paying off your reverse mortgage after you pass away. Plus, if you have a “No Negative Equity Guarantee” in your reverse mortgage contract, then if the mortgage amount due is more than the gross proceeds from the sale of the property, the lender will cover the difference between the sale price and the loan amount. Therefore, you will never owe more than the fair market value of the home.
Who Offers Reverse Mortgages in Canada?
There are two Canadian Schedule I banks that offer reverse mortgages: Equitable Bank and Home Equity Bank. Both banks’ reverse mortgage products are similar in their design and function. We can help you determine which is better suited to your needs.
What is a Reverse Mortgage?
Reverse mortgages are designed for Canadians who are 55 and older. The goal is to allow these individuals to tap into the equity of their home to assist in comfortable financial living. However, the difference is that once a reverse mortgage is in place, borrowers are not required to make regular payments. This provides access to a considerable inflow of cash, with the flexibility of optional payments. The only time payment will be required is when you sell or move out of your home.
The payout of the mortgage at this time would consist of the original principal balance, plus the accrued interest and any fees incurred since inception. Hence, it’s a reverse mortgage because you don’t make payments and the balance increases with the accrued interest, as opposed to reducing like a traditional mortgage. Fear not, the equity historically is still maintained or even grows as the appreciation value is generally higher than the interest accrual.
While the focus of a reverse mortgage is on older individuals, this is also a great option for individuals wanting to assist their elderly parents. Instead of selling and moving to a care home or assisted living, some individuals prefer to stay where they are familiar and instead opt for in-home care. A reverse mortgage is a terrific way to access the equity in the home, month by month, to pay for those care costs.
Reasons to Consider a Reverse Mortgage
Reverse mortgages are designed to allow you to access up to 55% of your home’s equity, thereby allowing you to convert your home equity into cash. This can be done as either a one-time lump sum payment, or you can choose to structure it to receive monthly payouts. The money received through a reverse mortgage can be used to pay off existing debts, gift money to family, expand qualify of life, add safety features to the home, or expand your investment portfolio.
You can also switch your existing mortgage dollar-for-dollar to eliminate payments and increase cash flow.
Benefits of a Reverse Mortgage
The benefits of a reverse mortgage don’t just stop at the ability to cash in on your home’s equity! In fact, these benefits also include:
- No monthly mortgage payments
- No income or credit qualifications
- Very low / little paperwork required
- Title and ownership of property remain in homeowner’s name
- Flexible options to break term early and to pay interest off monthly, if preferred
- Penalty waived in the event of death or care home placement to preserve the estate
If you think a reverse mortgage might be the right option for you or your parents, contact a Win Lui Group Mortgage Professional today to discuss your current situation and how this increasingly popular mortgage option can help.
Misconceptions about a Reverse Mortgage
With a Reverse Mortgage, You No Longer Own Your Home
FALSE. You always maintain title, ownership and control of your home. The reverse mortgage lender simply has a first mortgage on the title.
You Will Owe More Than the Value of Your Home
FALSE. Most reverse mortgages come with a “No Negative Equity Guarantee” the notes as long as the homeowner has met the required obligations, the amount you will have to pay on the due date will not exceed the fair market value of your home.
Reverse Mortgages are Expensive
FALSE. Much like a conventional mortgage, an appraisal of your property and independent legal advice is required for a reverse mortgage and will be similar to the costs you would incur on a regular payment mortgage. However, beyond this the only additional fees are a one-off closing and administration fee. When compared to the cost of moving to another home, the reverse mortgage is a much more affordable option.
Reverse Mortgages Have Higher Interest Rates
DEPENDS. While interest rates are typically a bit higher than a traditional mortgage, the difference is not excessive. In addition, it is important to remember that monthly mortgage payments are not a viable option for most retired Canadians. In addition, there are many who struggle to even qualify for a traditional mortgage. For these reasons, many retired Canadians are choosing reverse mortgages over conventional solutions.
You Can’t Pass on Your Home
FALSE. Another myth is that your children won’t be able to inherit your home if you utilize a reverse mortgage. This is not the case as your heirs will always have the option of keeping the property by paying off your reverse mortgage after you pass away. Plus, if you have a “No Negative Equity Guarantee” in your reverse mortgage contract, then if the mortgage amount due is more than the gross proceeds from the sale of the property, the lender will cover the difference between the sale price and the loan amount. Therefore, you will never owe more than the fair market value of the home.
Not Sure?
If you are an existing homeowner but not sure the best option for you, contact a Win Lui Group Mortgage Professional today for expert advice.
Not Sure?
If you are an existing homeowner but not sure the best option for you, contact a Win Lui Group Mortgage Professional today for expert advice.
Not Sure?
If you are an existing homeowner but not sure the best option for you, contact a Win Lui Group Mortgage Professional today for expert advice.