Reverse mortgages in Canada continue to grow in popularity, and there are a wide range of reasons why. Retirees who have no private pension or retirement savings can struggle to have a comfortable retirement with only the Canada Pension Plan and Old Age Security for income. Others want to stay in their home as they age but need to renovate it to make it more accessible, as their mobility becomes restricted. And some retirees want to have a more enjoyable retirement than their current retirement income allows. Many Canadian retirees are sitting on a huge asset — their home — and have little income or other assets. A reverse mortgage can be the ideal way to cash in some of their home’s equity to boost their retirement income.
If you move out or sell your home, paying back a reverse mortgage will be your responsibility. If you die, the responsibility for paying back a reverse mortgage will be your heirs’ or your estate’s. Many people wonder, do you have to pay back your parents’ reverse mortgage if they die? If they are the mortgage holders and they left their home to you in their will, then you would have to pay off the reverse mortgage, because it can’t be transferred to another person. Another big advantage of a reverse mortgage is that, on the whole, the timing for a reverse mortgage pay back is up to you. You get to choose the best time for paying back a reverse mortgage, unless one of three things happens:
The last surviving mortgage holder dies, or you move out of your home, or you sell your home.
A reverse mortgage can be a good idea for Canadians 55+ who own their own home and are looking to meet their cash flow needs during retirement. A reverse mortgage can supplement government pensions and retirement savings and is often used to cover unplanned medical expenses, home renovations, living expenses, or to consolidate debt and reduce debt payments.
Similar to conventional mortgage rates, reverse mortgages are offered with fixed or variable rate terms and are impacted by the actions of the Bank of Canada (BoC). Since the BoC raised its overnight interest rate for the third time this year, to 1.50%, on June 1, mortgage rates are no doubt on the minds of many homeowners. This is also true for Canadians with a reverse mortgage or those considering one.
Detective Constable Kristin Thomas, has been with the Toronto Police Services for 23 years. She is an experienced fraud investigator working in the Financial Crimes Unit, Corporate Crimes Section. According to Constable Thomas, the fraudsters’ scams play to the victims’ loneliness –and with one thing leading to another, they develop into romance. To avoid falling into the elaborate traps set by these predators, Thomas suggests being extra careful about what you post online or how you word your profile. Most victims never even meet their predator face to face. If you think you are being scammed, Thomas suggests getting support from friends, family, or your doctor. it’s essential to look for the signs of fraud that Constable Thomas describes and learn how to quickly recognize these signs and reach out for help.
A mortgage refinance can be a useful financial tool, allowing homeowners to cash in some of the equity in their home and/or secure a considerably lower mortgage interest rate. Refinance mortgage calculators in Canada are really helpful when planning for this process. There are costs involved when refinancing a mortgage, so when you need to know if it’s worth it to refinance, a mortgage calculator can help, as well as being able to help you plan the best time to refinance your mortgage.