Reverse Mortgages in Canada Expanded

Guidelines Relaxed For Seniors’ Financing in Canada

WEBWIRE – Friday, September 16, 2011

Seniors’ Lending Centre is pleased to announce the expansion of guidelines by HomEquity Bank on their Canadian reverse mortgage product for seniors in Canada.

An industry leader in home equity lending to seniors, HomEquity Bank offers the premiere reverse mortgage in Canada. Eligibility has been dramatically expanded: it is now available to homeowners 55 and older on their principal residence (previously 60) and homeowners can now access up to 50% of the home’s current appraised value (previously 40%).

Reverse mortgages in Canada (also known as the Canadian Home Income Plan) are designed for older homeowners and allows them to obtain cash without having to sell their home. However, not all lenders offer reverse mortgages. Unlike an ordinary mortgage, payments are not required. Rather, interest accumulates and is repayable when the home is sold or is no longer your principal residence. Historically, house prices tend to increase. As the balance of your loan slowly accrues over time, it is expected also that the home’s value continues to rise. This process ensures equity in the home over the long term. Regardless of market fluctuations, the lender guarantees that no matter what, the loan balance will never exceed the fair value market of the home. On average, over 50% of the house value is still equity by the time the reverse mortgage is repaid.

A consultation with a government licensed mortgage broker from the seniors’ specialist team at Home n Work Mortgages Inc. can help you determine the best choice for your unique situation. Before making a decision, you should also consider using your equity in your home to secure a different type of loan, such as a line of credit or an equity loan structured as a regular mortgage. Senior’s Lending Centre works for you. Their goal is to find the best solution based on your financial needs and the options available. As a national brokerage, they can shop all of the lenders across the country and find you the best rate.

In Canada a reverse mortgage is structured substantially different from it’s American counterpart, so caution should be exercised when reading articles that originate south of the border. The money is tax-free, does not affect OAS or GIS benefits, you remain on title to your home, and the outstanding balance can never exceed the value of your home. There are horror stories online of seniors being forced out of their homes in the US. This cannot happen with a canadian reverse mortgage.