Reverse Mortgage Frequently Asked Questions

What are the requirements for a reverse mortgage?

  • Both you and your spouse must be over the age of 55
  • The reverse mortgage must be the first mortgage so if you have an existing mortgage it must be paid off with the reverse mortgage
  • Tax arrears must be paid before funding or from funds
  • You must have adequate insurance
  • If another person other than a spouse is on title they must be removed before funding – only the people who took out the mortgage can be on title.
  • Both spouses do not need to be on title
  • You must get independent legal advice before signing mortgage documents – can be paid for from proceeds
  • A home appraisal is required – must be paid for by applicant at time of appraisal
  • Some properties may not be eligible – badly run down, seasonal, life lease, etc.

What are some requirements that are NOT needed ?

  • Medical exams – not required and medical issues are not an issue
  • Income is not an issue as long as you can pay the property taxes and regular household bills
  • No payments are required as long as at least one spouse lives in the home
  • You will never be asked to sell your home
  • Amount owing will never exceed fair market value

Will the homeowner owe more than the house is worth?

The homeowner keeps all the equity remaining in the home. The equity remaining depends on the amount borrowed, the value of the home, and the amount of time that’s passed since the reverse mortgage was taken out.

Will the bank own the home?

No. The homeowner retains title and maintains ownership of the home. It’s required for the homeowner to live in the home, pay taxes on time, have property insurance, and maintain the property in good condition.

Will the homeowner be eligible if they have no income or poor credit?

Yes! Credit score or income verification is not required to qualify for a reverse mortgage. The amount of money the homeowner is eligible for is based on age, spouse’s age, location of the home, type of home, the amount of secured debt, and the home’s appraised value.

Should reverse mortgages only be considered as a loan of last resort?

No. Many financial professionals recommend a reverse mortgage to supplement monthly income instead of selling and downsizing, or taking out a conventional mortgage or a line of credit.

Should reverse mortgages only be considered as a loan of last resort?

No. Many financial professionals recommend a reverse mortgage to supplement monthly income instead of selling and downsizing, or taking out a conventional mortgage or a line of credit.

What fees are associated with a reverse mortgage?

There are one time fees to arrange a reverse mortgage such as an appraisal fee, fee for independent legal advice as well as our fee for administration, title insurance, and registration. With the exception of the appraisal fee, these fees are paid for with the funding dollars.

What if the homeowner can’t afford payments?

There are no monthly payments required as long as the homeowner is living in the home.

What if the homeowner has an existing mortgage?

Many of our clients use a reverse mortgage to pay off their existing mortgage and debts.

 

The amount you are eligible for will depend on your age(s), location and type of property. Rates are the same for all clients – only the maximum percentage you can borrow will change. You can borrow more as you get older.

Reverse Mortgages in BC Contact Us

For more information on reverse mortgages please contact Jaret today at 604-816-5988
Monday to Saturday between the hours of 8:00 am to 6:00 pm PST  we will respond within an hour
or send us an email and we will respond within 24 hours of receiving your email.