While Tom has pointed out that reverse mortgages are controversial, they are becoming increasingly popular in Canada. It’s a plan that gives older Canadians greater financial security. A reverse mortgage is a type of home loan that allows homeowners to convert a part of the equity in their home into cash. Through this mortgage, the homeowners in Canada can obtain cash, without having to sell their home. However, one can qualify for this loan if they are at least 60 years old and owns their home or condo.
Benefits of taking a reverse mortgage in Canada
- No monthly payments: A reverse mortgage can provide a regular source of income to the seniors rich in home equity in Canada. Rather than consumer paying the lender, here the lender pays the consumers.
- It is easy to qualify: Almost all the senior homeowners in Canada have a considerable amount of equity in their home. Due to this reason, the eligibility criteria don’t include credit scores or income in the qualification process. Homeowners who are at least 60 years old can qualify for this mortgage.
- Tax-free income: The seniors are not required to pay any tax on the revenue received on this mortgage. It’s their home, their money, and they have already paid tax on it. Technically, this is not income at all – it is merely changing their non-cash equity into cash.
- One cannot be kicked out of his home: The homeowners cannot be evicted from their homes under the terms of a reverse equity mortgage. A homeowner has the legal right to stay in his home until he passes away or until he decides to sell his home and move out.
- One can use the money for anything: The money that the homeowners receive from this type of mortgage can be used for any purpose. This means that the homeowners can use this money for paying the maintenance and utility bills or going on a dream vacation.
- Allow you to remain in your home: It often happens that the homeowners find it difficult to pay their maintenance and utility bills in Canada. This kind of a mortgage lets them to convert the value of their home into cash – thereby allowing them to stay in their home.
The demand for reverse mortgage in Canada is increasing because of the above mentioned benefits. If you are planning to take this mortgage, then you can consult a mortgage specialist for further information and advice.
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