These are some of the things you should be aware of when it comes to reverse mortgages in Canada:
1. What can I use the funds for?
Refinance your existing mortgage, purchase a new home to live in, or renovate your existing home so you can remain in it.
Cover life expenses like debts, renovations/improvements, travel, and help children or grandchildren with a Living Inheritance so you can enjoy their happiness with them. Pay for in-home care or medical expenses.
2. Can I prepay my mortgage and at what cost?
No Prepayment charge applies:
- On regular interest payments of a fixed amount by automatic withdrawal from you bank.
- On a single prepayment of up to 10% of the outstanding principal and interest made within 30 days following each anniversary date.
- After five years on payments made within 30 days following reset date.
3. What can my debt ratios be for Reverse Mortgages in Canada?
None is required, and you can get as much as 55% of the value of the property.
On an individual basis, additional conditions may apply. The minimum Lump sum advance is $25,000. And the minimum subsequent advance(s) must be at least $5,000. A minimum Credit score is required to be sure you have handled your past affairs in an orderly manner.
4. What happens if I have been deferring my Property Taxes?
Property taxes must be brought up to date, this can be done with the first advance of the mortgage.
5. Except for an application fee that I understand varies from time to time what other costs should I
The home will need to be Formally appraised, and costs generally run between $350-$650. Independent legal advice is required on all mortgages and those costs are estimated at $500-
6. What other documentation is involved?
You would need to have adequate home insurance. A copy of your current property tax bill is required. Two pieces of valid identification. Power of attorney (And Power of attorney identification) if applicable. Personal financial statements.