Seniors Lifestyle Magazine

Tag: senior finances

  • How You Can Realistically Save Quickly

    How You Can Realistically Save Quickly

    It can sometimes be helpful to have a little extra in the bank. Whether you are trying to save up for something nice like a holiday, or you just want a bit put aside for a rainy day, it is always a good idea to have a little extra cash flow. However, if you want to save up quickly, you need to make sure that you are doing so realistically. Here are some of our top tips to help you build up your savings as quickly as possible. 

    Set a Realistic Goal

    The first thing you need to do is ensure that you have a target goal in mind. It is not enough for you to simply say “I will save money each month”. There is no structure or discipline there, and it could mean that you could end up skipping when you should be saving. Before you know it, you only have $100 put away in your bank account, when you ideally should have a lot more.

    Therefore, you need to set a target for how much you are going to save each month without being unrealistic. For example, you might decide that you want to save $1000 a month. Depending on your income, this might be a very achievable goal, and it will be easier than you think to do so when you know what you are doing.

    However, you will need some tips on how to save $1000 in a month so you can be certain that you are following best practices. This step-by-step guide should give you some further pointers about the things that you can do so you are able to put as much as possible to your savings. It can be easier to realistically save up than you might imagine.

    Assess Your Spending

    You need to know what type of spender you are before you commit to saving up a lot in one go. This is likely to be a lifestyle change for you, so it needs to be something that you know you will be able to sustain for a long time. After all, why stop at just saving up $1000 in a month when you can keep that sustained and put more and more towards your savings account? Don’t think short-term – you need to think about some of the things that you can do in the long-term that will help your spending.

    Try to identify where you spend the most money. You might find that you are more likely to spend money at the weekends because you are going out to meet with friends. You might also be guilty of running out to pick a coffee or a treat at lunchtime rather than stick with the food you could bring from home. 

    These are all spending habits that can be altered. You could set a budget for a night out, or encourage your friends to come over for a night in instead. Likewise, you could learn how to make some more interesting lunches that are affordable yet filling so you are less likely to head out for something else. Encouraging new spending habits like this will benefit not just your immediate spending plans, but it will also help you to become a more effective saver over time.

    Find a Bank Account That Works for You

    You can cut costs here and there, and implement strict plans so you are moving X amount of money on a certain day, but that does not mean that you are managing to save as effectively as can be. It is vital that you also find a bank account that really works for you.

    Ideally, you should find one that has a good interest rate and offers benefits for those who manage to save more. You might even be able to find one that locks your money in for a certain time period so you can’t spend it until a certain time limit has passed.

    This might mean that you have to switch banks to find a better deal. Don’t worry if you have to. There are many banks out there that all offer different products. If you want to ensure that you are getting the best deal, you need to be open to potentially going to a different bank.

    You might think that saving a lot of money in one go is going to require a lot of discipline on your part. While this might be true, it can often be easier to do so than you might think as well. With the right attitude and maybe a willingness to seriously adapt the way in which you approach spending and saving, you should be able to reach your goals. Start thinking about some of the ways in which you can begin to save more effectively now!

  • How To Beat Inflation When Investing for Your Retirement

    How To Beat Inflation When Investing for Your Retirement

    Are you worried that your investment values won’t keep up with inflation when it comes time to retire? With the Consumer Price Index rising to almost 7% in recent months, this concern is becoming even more real for many people who will soon retire or have already retired.

    You need to carefully consider your own situation when you look at how to invest, to ensure your purchasing power is not eroded by inflation over time. 

    Investing in gold is a safe bet for future retirees and provides an opportunity to protect your portfolio against inflation. It’s a good idea to have a look at the best gold IRA companies for more advice on how to invest.  

    Explaining Inflation

    Inflation is the rate at which the value of a currency decreases and the price of food and other goods and services increases. It’s a measure of how much less your currency buys you every year. Inflation ultimately reduces the buying power of your investments. 

    Why You Should Diversify With Gold

    There are several reasons to diversify your retirement investment portfolio with a gold IRA:

    • The value of gold has increased considerably over the last two years and is still increasing. 
    • Your investment in gold can protect you against increases in inflation. Food prices and other costs are increasing, and you need to be able to keep up when you retire. 
    • There is a high demand for gold, which further increases its value. 

    Consider Other Options

    Other, more traditional investments can also offer you some protection against inflation, including the following: 

    Annuities

    Annuities are a type of retirement insurance that will give you a fixed monthly payment at the end of your investment term. Fixed annuities are usually the best option, as the fees are lower and they offer more security.

    Treasury Inflation-Protected Securities (TIPS)

    These Treasury bonds are a low-risk investment since the government backs them. TIPS can protect your buying power from declining. The price of these securities is adjusted so that they maintain their value as inflation increases. You will never receive less than the original amount you invested. 

    The interest for TIPS is based on a fixed rate. You will receive the interest on your investment every six months. You will receive higher interest if inflation rises, but your interest will be lower in the case of deflation. The maturities for TIPS are five, 10 or 30 years and you can buy them through the Treasury-Direct system. 

    It’s also possible to buy them through a TIPS mutual fund, but you will have to pay management fees. 

    Other Ways To Beat Inflation When You Retire

    There are some other practical ways in which you can boost your retirement savings and beat inflation. 

    Become Self-Sufficient

    • Rent out your house, or at least part of it. If you’re in a good location, you should be able to raise the rent over time, without losing tenants. 
    • If you’re worried about inflation soaring, buy everything you need now, if you can afford to do so. You can buy a stockpile of durable goods if you think prices will increase in the near future.  
    • To protect yourself from rising food prices, consider growing your own vegetables and get some chickens, if you can. 
    • If you don’t want to be dependent on increasing maintenance, insurance and gas costs, live in a place where you can walk or use public transport. 

    Final Thoughts

    One of the best things you can do as part of your retirement planning is to diversify your portfolio. A combination of inflation-beating investments, as well as lifestyle changes that will allow you to beat inflation in the long run, will be your best strategy. 

  • How Does a Reverse Mortgage Work?

    How Does a Reverse Mortgage Work?

    Look this is not my first rodeo. And let me tell you something: I would not be here telling you about Reverse Mortgages if I knew it was a way for a bank to take advantage of a senior, or worse force a Canadian senior to leave the home they loved.

    A reverse mortgage is not a way for the bank to take away your home. It is a loan, like any other. The big difference is how you pay it back! It is a loan designed for older homeowners and has helped millions of older Canadian homeowners live the retirement they want.

    Other mortgages are paid each month, but with a Reverse Mortgage you can pay it whenever you can, when it works for you or you can wait and pay in one lump sum whenever you decide to leave the home or leave it for your estate to pay back. Your beneficiaries still retain the equity after paying back the loan and the interest owed.

    A reverse mortgage is a simple idea really. Just like you invest your money in a bank for them to do what they do and give you compounded interest where they do not give you interest monthly but just add it to your investment – in Reverse!! The bank gives you money to do what you what you want, say pay bills, renovate the home, go on a vacation, invest, or help your children or grandchildren. You just pay it back with interest when you decide to sell, or you pass it on to your estate to pay. Most importantly you still own your home! It is a product designed for seniors and it has helped hundreds and thousands of Canadian seniors live a more stable and secure retirement and to stay in the home they love.

    Reverse mortgages are not for everyone… but it is right for seniors who are on limited pensions and want to live their retirement on their terms.

    IF FOR ANY REASON the amount you owe on the mortgage plus the interest exceeds the value of your home – the bank is REQUIRED to take the loss. This is how Reverse Mortgage in Canada is mandated – to protect seniors.

    To learn about about the downsides of a reverse mortgage, click here

     

  • Life Settlements are a Growing Source of Liquidity for Seniors

    Life Settlements are a Growing Source of Liquidity for Seniors

    For seniors who have been paying for life insurance for a decade or more, their policies could now be reaching a point of high profitability thanks to their generated cash value. With the cost of living rising to the point that Social Security benefits are increasing, it’s more important for those 65 and older to consider what their retirement might look like. The most concerning impact of the COVID-19 pandemic in 2020 is the inflated cost of basic living necessities; prices rose by 7.3 percent in April 2021, pushing many with limited incomes to their financial breaking points just by financing things like groceries and gasoline.

    Life insurance liquidity is one possible solution for seniors to consider taking advantage of as they reassess their financial security. Those who have already had to tap into their retirement funds are in greater need of reprieve, and that may come in the form of their long-held policies.

    What Is Liquidity?

    Liquidity refers to the ease of converting a financial asset into spendable cash. Life insurance has some of the highest liquidity of any financial investment, especially for seniors who have had their coverage for some time. As long as you have an eligible plan type, you can eventually surrender coverage for your acquired cash value and receive a lump sum settlement. When it comes to investments, policies and stocks are often preferred because they have higher liquidity than physical assets. Jewelry, for example, may be valuable, but it can depreciate over time and wind up costing you more than you earn back when you eventually sell it.

    What Type of Life Insurance Has a Cash Value?

    Whole, or permanent, life insurance is the most common form of coverage that has a cash value. Each month, a portion of your premium is set aside and put toward this value. Interest also generates on top of it, so you essentially earn money back just by paying for your policy. However, there are some forms of life insurance coverage that do not have cash value liquidity. Instead, they are invested in funds.

    Variable and universal life insurance are often chosen by people for their high earning potential, but they come with downsides. While you may be able to generate wealth more quickly with them, they come with more fees than permanent coverage and cannot be sold directly for cash. Instead, you have to sell the assets you’ve acquired through your policy, such as bonds or mutual funds, to receive any kind of money. In an economic downturn, this can cause what were once valuable assets to quickly dwindle away.

    Variable policies also have something called mortality and expense risk charges. Because these types of life insurance are designed more for investment than genuine protection, there are fees incurred for the holder’s recipients if they die and the death benefit has to be dispersed. While there is a surrender value to consider, it will take at least 10 years for your policy’s cash value to be equal to its surrender value. Maintaining coverage with a variable policy can quickly become expensive without the same security of financial gain as permanent coverage.

    How to Sell Your Life Insurance

    If you have had coverage for some time and are ready to make money from it, you can look into how to sell your life insurance policy. You could surrender it to your original provider, but this tends to net you the lowest profit. Instead, consider looking for a third-party broker who buys insurance policies. A life settlement allows you to liquidate your policy for a percentage of its death benefit amount. This amount, however, will be greater than the policy’s cash surrender value. For someone who has been paying premiums for 10 or 20 years, this can be a significant amount of money.

    Before you sell anything, you should first do your research. Learn about the pros and cons of selling your life insurance, and speak with an independent financial advisor. This person will help you discern how much you should receive after fees and charges are deducted from the sales price. For seniors who have coverage they no longer want or need, settlements offer a way to profit from their investment and put their money toward more meaningful things. This could be paying your rent or mortgage, funding retirement, paying for medical bills or even paying a portion of your grandchild’s college education.

    Factors to Consider When Exploring Life Settlement Options

    Below are things every senior should think about before they sell their life insurance policy. Remember to always do your research thoroughly before committing to any arrangement. The more you know, the easier it is for you to protect your finances.

    Your End-of-Life Costs

    Even if you don’t need the level of coverage you currently have, you should consider who will pay for costs you may have toward the end of your life. This could include medical care and assisted living, in-home nurses, palliative care and funeral arrangements. If your loved ones become caretakers, the financial responsibility will fall entirely on their shoulders if you do not have other funds put in place. You may consider settling your larger policy and taking out a smaller one just for these types of costs. You could look into a 1035 Exchange, which allow you to trade one policy for another and still get a cash value without having to pay taxes on the income.

    Broker Licensing

    You should always confirm that the broker or company interested in purchasing your policy is licensed to operate in your state. You can check your state’s insurance commissioner database to ensure that you’re dealing with reputable professionals. You should also look online for reviews. What do past clients have to say about their experiences, and are there any court cases or complaints filed against the broker or company?

    Price Accuracy

    There is no standard for pricing life insurance policies. This means that you can get a quote from one buyer that seems fair, only to have another offer you more. How do you know which one is actually right? The best thing to do is request and compare several quotes. A broker can get these for you, but you will have to pay them a commission fee. The cost of financial services during this process, however, are well worth the cost. They protect your finances and ensure you receive a fair amount for your hard work and years of investment.

  • Holiday Giving Shouldn’t Break The Bank

    Holiday Giving Shouldn’t Break The Bank

    There are lots of ways you can keep your gift giving under control and here are a few ideas to pick from: 

    Make a gift list with what you can spend by each name. Draw that amount of cash and only spend from your wallet, or check your accounts that pile up reward points and try to use them up to buy gifts. 

    Make your own gifts. You can find items like these on-line or in many magazines: chocolate dipped spoons + cocoa mix, salad dressing in a measuring jar, or flavor cheap vodka with fruit. Of course there is always sewing, knitting, and crocheting things. You can also pull together your own gift baskets with seed packets and gardening gloves; or wine, cheese, and crackers; or a recipe with all of the dry ingredients needed with appropriate spice packets for pumpkin bread or pancake mix + syrup.

    Create a card and give the gift of time/experiences such as babysitting, making a meal, or offering to do drive to a park or museum for fun.

    Creative gift wrapping. Use colorful comic strips, out of date maps, the inside of grocery bags, or Kraft paper. Decorate anything plain with colorful masking tape or patterned Washi tape. Best deal on rolls of Kraft paper are at Ace Hardware. Gorgeous Washi tapes are available at https://thewashitapeshop.com or bargain Washi tapes can be had at https://www.washitape.com . You can also tie gifts with colorful twine. Lots to choose from  www.etsy.com. Other ideas are using rubber stamps or colorful stickers. Note: If you really love traditional paper and ribbon, buy this year after the holidays for next year’s use when they are always 50% off! 

    Don’t pay for shipping. If you have to ship gifts, do so only if vendor pays for the shipping. Otherwise, give gift cards like on a credit card, or Amazon card if you don’t know what they would like. If you know what they will definitely use, buy a targeted gift card. 

  • Is Resale For You?

    Is Resale For You?

    Now is a really great time to get rid of things you do not use or need any more, and your children  have already said they don’t want them!  

    Lots of people make a tidy profit holding a garage or yard sale. Go room-by-room, cupboard-by cupboard, and closet-by-closet. Ask yourself, “How long has it been since I’ve used or worn  this? If it’s really been a long time, pull it out for the sale and make a list.  

    Advertise in advance in a free local paper or on signs around town, and signs pointing to your  place on the day. You can also tack announcements up on community bulletin boards. Weekend  days are the best days to hold these. Starting time is usually about 9 or 8 AM, but if you have  advertised antiques or collectibles, you will have dealers ringing the bell at 7AM.  

    Anything you want to sell should be clean and not chipped or broken. If you have broken items  like old doors, window frames, or stuff an artist might use, you can always mark them as “free.”  

    Determine your selling price for each item in advance. Your shoppers are looking for bargains. If  items are more valuable antiques, check on-line for their value and set your price below that.  Make a sticker price tag and place it on each item. Note: you can always bargain down later if  you want. There is also no reason you can’t say on the tag, “$50 or best offer.” 

    Have some $1 and $5 bills on hand because everyone will pay you with $20 dollar bills! You  might want a couple of rolls of quarters too. Kids will pay with change. Keep your money in a  fanny pack or a watched cash box. Do not permit anyone to enter your home.  

    If you have a lot of books or CD’s or similar items for sale, you can group them in boxes with a  single sign on the box saying $.50 per book, etc.  

    Lastly, if it looks like there is a lot to choose from, you can expand your sale to other friends and  neighbors who have their own lists and have tagged their selling prices. It will attract more  people.  

    When all is said and done, gather what’s left and make a donation to a charity of your choice. Sit  back and count your cash. Remove any of the signs you previously put up. 

  • Advantages and Disadvantages of a Reverse Mortgage

    Advantages and Disadvantages of a Reverse Mortgage

    Unlike other countries, Canada has government regulations in place to protect the rights of homeowners who take reverse mortgages.

    • The bank will never own your home
    • The bank can only demand the principal and interest that has accumulated over the term of the loan.
    • The bank has no claim over your home’s equity
    • The bank is not allowed to order the applicants to move.
    • The equity on the property will remain the asset of the Estate in the event applicants pass away.
    • There is no mortgage insurance required on the loan.
    What might be considered a reverse mortgage default in Canada?

    It will be considered a default if you:

    • Misrepresent information on your application for your reverse mortgage.
    • Fail to adhere to the terms and conditions of your contract such as fail to keep your home insurance valid or lapse on payment of your condo fees and property taxes.
    • Knowingly allowing your property to fall into disrepair that could cause its value dropping.
    • Using the funds gained from your reverse mortgage in any illegal activities.
    Costs of reverse mortgages in Canada

    Costs of reverse mortgages are significantly cheaper than in the US, however,

    • Interest rates charged are generally higher than traditional mortgages.
    • They will expect you to pay for a home appraisal.
    • Your lender will charge a setup fee.
    • If you choose to pay off your reverse mortgage early, prepayment penalty and legal discharge fees will be applied.
    Advantages of a Reverse Mortgage:
    • Regular loan payments are not needed as part of the terms and conditions.
    • You can take advantage of your largest asset now instead of having to wait.
    • No taxes are due on the money you borrow.
    • You can instantly cash in the equity of your home without having to leave it.
    • You can choose from a variety of different options regarding how and when you receive the money
    • Releasing equity in your home does not affect your GIS (guaranteed income supplement), CPP (Canada Pension Plan) or your OAS (old age security)
    Disadvantages of reverse mortgages in Canada
    • Your beneficiaries will receive the value of the home, after paying back the reverse Mortgage and the unpaid interest.
    • This value will be less than they would expect because of the higher interest rate and compounded interest.

    The good news is that the probate payable on the transfer of the asset to the beneficiary will be less because the mortgage will be deducted from the value of the asset.

    When should I consider a Reverse Mortgage?

    Reverse mortgages have helped thousands of Canadians who have few dependents or family. It is great for people who have most of their net worth tied up in their home’s equity and want to live their retirement years well.

    It is invaluable for senior homeowners who find themselves unable to sustain the retirement lifestyle they desire. Or those who want to maximize their investments in Tax-free Savings Accounts, Life insurance, or even investing in a rental property.

     When is a Reverse Mortgage a Bad Idea?

    This product may not suit 

    • those who may have younger dependents still living at home and
    • homeowners who have a source of income and can qualify for other types of mortgages 

    We recommend you contact me to provide you with accurate and up-to-date rates and terms as they apply to your unique situation.

    To learn more about reverse mortgages watch this video here

  • Preparing Financially For Your Retirement

    Preparing Financially For Your Retirement

    Preparing financially for your retirement is a lifelong project. That should not make you feel intimidated, rather it should make you realize that you have some time to figure things out. But there are certain goals that you should hit as early as possible. There really is never too early to start considering your retirement. 

    Start Early

    The earlier you start investing in your retirement, the more money you will end up with when you do retire. This is because your retirement fund will utilize compound interest, which means that it will accrue interest from not only your principal but also from the interest you previously gained. That means that the earlier you start investing, the more you will accrue in interest over time. You also want to start investing as early as possible because even if you cannot invest a lot of money, it will give you more time to put away more of your smaller payments. It will also give you time to pay off student loans or small business loans.

    Create an Emergency Fund

    Typically a financial advisor will recommend that you start and fund an emergency savings account before you start focusing on your retirement. This is because if anything unexpected happens like an injury or car failure, then you can continue funding your retirement fund while simultaneously handling the emergency. You should also never take any money from your retirement fund because there are penalties for withdrawing money early. This money is intended for your retirement so there are rules about when you can withdraw any funds. The age at which you can withdraw from your retirement funds is 59 1/2. 

    Remember Health Insurance

    When deciding how much money you want to save for your retirement, keep in mind that you will have to rely on Medicaid and statistically, many on Medicaid need additional insurance. This insurance will need to be paid for by your retirement fund, social security, or from the part-time job that those collecting social security are allowed to have.

    Plan Backwards

    To initially understand how much money you will need to invest monthly until you are at the age of retirement, determine how much money you will need. Once you do, utilize one of the many retirement calculators that you can find online. You can then see how compound interest will affect the situation and what would happen if you invested more each month. 

    Utilize Your Employer’s Retirement Plan

    Many employers offer a 401k or something similar depending on your profession. Make use of this plan by investing a portion of your paycheck every month. The fantastic thing about investing money into your 401k is that this is pretax money. Meaning that you actually save money from taxes when you invest your pre tax funds. Granted, you will have to pay taxes when you withdraw money from your 401k, but you can make more in the long run. Companies can also offer a match program. This means that they will match your investment up to a certain amount, which is essentially free money. Your employer will also have resources to help you decide how you would like your retirement fund invested. 

    Look Into an IRA

    An IRA is another kind of retirement fund that is post-tax. That means that you will not have to pay taxes when you withdraw your money at the time of retirement. IRA stands for Individual Retirement Account. There are several different kinds of IRAs such as a Traditional, a Roth, and a Self-Employed. Depending on your income, you can get a tax break for investing in your IRA when you file yearly. Deciding how to invest your IRA is up to you. The easiest option is to choose a target-based fund. This is a selection of stocks and bonds that varies as it gets closer to your target date of when you want to retire. Typically it will invest in riskier ventures when you are younger and then invest in safer options, like bonds, as you get closer to your target retirement date. 

  • Dos and Don’ts For Having Your Will Drawn Up

    Dos and Don’ts For Having Your Will Drawn Up

    While it may be uncomfortable, you are going to need a will for when you pass away or if you are ever incapacitated. This is especially true if you have children or possess many assets. One of the kindest actions you can do for your loved ones is to make sure that when you do pass away, they are not left with the chaos of not having a will.

    Find a Lawyer Who Cares

    Don’t end up with a lawyer who not only cares about their sales closing, but will take the time to thoroughly help you draw up your will until you’re satisfied with it. Do take the time to find an attorney that you trust and who is knowledgeable on the topic. You always want to choose a lawyer that specializes in what you need them to do. Because the law is so broad, someone who is a criminal defense lawyer is not going to know the ins and outs of drawing up your will. Also when you write your own will you risk it being considered invalid because it is not signed, dated, or witnessed correctly.

    Don’t Forget About It

    Once you finish the process of drawing up your will, you should revisit the will if you experience any major life changes. If you have a sudden windfall of money, that will change the circumstances surrounding your will. Also as you get older, you may have different opinions and you want to make sure those changes are honored in your will.

    List Your Trusted Individuals

    When it comes to choosing the executor of your will, consider who would best handle doing what you need them to do. Also, consider if you want the responsibilities to be shared among multiple people. Remember you need to also choose a witness for when you sign your will. If your will is ever contested, that person will need to be trustworthy.

    Don’t Make Alternatives

    Unfortunately, your will is at times a bland legal document and some people want to create a fun or personalized addition to their will. While this may sound interesting, it can cause your will to not be legally binding and therefore nullifies your wishes.

    Consider Your Children

    Your children are your legacy and you may want to make sure they are taken care of on the occasion something happens to you before they are legal adults. You will need to decide who you would want to take care of and you can also determine how their inheritance is given to them. Many people decide certain amounts to be given out at different times as the children age. It is also important to have a discussion with the person you wish to take custody of your children if something ever happens to them.

    Don’t Forget About Your Pets

    For some people, their pets are their family. So when considering what to include in your will, remember your pets. Name someone who can take care of them and discuss it with them ahead of time.

    Think About End-of-Life Care

    There are circumstances where you may not be cognizant of your surroundings but you will not be dead yet. Drawing up a will can help those around you decide how to take care of you because you have told them your wishes. If you do not want to be resuscitated then specify. If you do not want to be put into a nursing home, then specify. Doing so can help everyone involved.

    Don’t Under Explain

    Do not spare any details when you are creating your will. You will want to make sure that everything you want is explicitly stated so it is properly taken care of

    Conclusion

    Considering your death can bring a lot of different emotions with it, but it can benefit everyone involved if you get your will drawn up before it is too late.

  • What is a Reverse Mortgage?

    What is a Reverse Mortgage?


    Reverse mortgages are loans that allow homeowners to use their properties existing equity to get finance without the need to sell their home.

    Reverse mortgages are just like any other type of loan, the key difference is how they are paid out and that they do not require interest to be paid monthly. In Canada, they sometimes refer to these as equity release loans.

    How much can I borrow?

    The amount you can borrow will depend on several factors including

    • The property owner’s age
    • The appraised value of the property
    • The terms and conditions provided by your lender

    You can borrow up to 55% of your property’s current value. The older you are the more you can borrow.

    How can I qualify for a Reverse Mortgage in Canada?

    There are some basic criteria that need to be met before you are eligible to receive a reverse mortgage these include:

    • You need to be the legal homeowner.
    • Be a senior or at least 55 years of age or older.
    • When completing your application, all individuals on the properties title who are least 55 years or older, need to be listed

    Some lenders may also apply different terms and conditions, such as you may need to employ and provide proof that you have received legal advice before making this decision.

    Before approving reverse mortgages, lenders may usually consider:

    • The value, type, and condition of your property
    • Age of any individual registered on your home’s title and your age
    • Most importantly, you will only be allowed to get a reverse mortgage on your primary residence. You must reside there for at least 6 months of the year.
    How does a reverse mortgages work?

    Before you are eligible to receive a reverse mortgage, any existing outstanding lines of credit or loans that your home has been used to secure will need to be closed.

    This might include any HELOC (Home Equity Line of Credit) or your existing mortgage. It is possible to get your reverse mortgage first and use this to pay down any existing debt. Once your home is debt free, you can use the rest of the cash for any purpose you wish.

    • You can receive your reverse mortgage payment as a single lump sum.
    • You can also take a percentage upfront and then receive regular payments over time
    How reverse mortgages in Canada are repaid?

    There is no requirement to make regular payments against a reverse mortgage. You can exercise the option to pay off your interest and principal at maturity or in full at any stage. Paying it off before maturity is usually subject to penalties. You can also renew a reverse mortgage perpetually.

    Reverse mortgages will need to be cleared under the following circumstances:

    • When the property is sold.
    • The property is no longer your primary residence
    • In the event of the death of the final borrower
    • You default on the loan’s terms and conditions

    We hope that the information provided on reverse mortgages in Canada proves useful. if you have any questions or queries. We recommend you contact me today. We can provide you with accurate and up-to-date rates and terms applicable to your unique needs.

    Click here to watch this short video on how to qualify for a reverse mortgage.