Are you a senior citizen that is over the age of 62? Do you own your own home? Are you finding it harder to make ends meet at the end of the month? You may have thought about applying for a reverse mortgage. A reverse mortgage can help supplement your monthly income, however, it is important to know all of the benefits and risks of applying for a reverse mortgage. This article will discuss some of the benefits and risks associated with a reverse mortgage.
First and foremost are the benefits. The most obvious benefit is exactly what the name of it suggests. It is a reverse mortgage. Instead of you making monthly payments to the bank, you are receiving monthly payments. Also, there are different ways to receive your payment. You can receive it as either a lump sum payment, receive it in monthly installments for the duration of the time you live there, or you may also receive an advance on a line of credit.
Secondly, are the risks. One major aspect to remember is that a reverse mortgage is essentially a loan. Loans have to be repaid at some point. There are a few repayment options to be taken into consideration. First off, when you sell the home the loan will need to be repaid. Also, even if you don’t sell the home but just move out, the loan will need to be repaid. Finally, if you were to pass. It is important to know that your beneficiaries may not inherit the house like you thought. First and foremost, before anyone inherits the house, the loan needs to be repaid. This is generally done using funds from the estate. If it is not paid, the home will need to be put of for sale in order to repay the loan.
In conclusion, these are just a few of the pros and cons of a reverse mortgage. When considering a reverse mortgage canada, it is important to discuss these matters with your loved ones, especially if your intention is to leave them the home. A reverse mortgage is a huge financial commitment. When considering this type of loan, it is important to weigh all of the risks and benefits against your current financial situation. Then, and only then, are you able to make an educated decision about what is the best choice for you and your family.
Reverse Mortgages in Canada 