Not a lot of people are aware of what a reverse mortgage is or what it can do for them, but it is something truly worth understanding for a variety of reasons – including real estate purchases in Vancouver.
What Is a Reverse Mortgage?
A reverse mortgage is intended for those 55 years of age and older who are currently homeowners. It allows homeowners to take out an additional mortgage or free up disposable income based on the equity in your current home, without having to sell your home you have likely invested nearly a lifetime of payments into.
Although a reverse mortgage is considered a loan, it is secured against the value of your home, so you do not actually have to pay back this loan until you move or sell your home that the loan is set against.
How Is Home Equity Assessed?
The equity of your home is assessed based on the difference between the home you mostly own, and the value of the unpaid balance.
What Benefits Are There in Acquiring a Reverse Mortgage?
As mentioned, a reverse mortgage can help you acquire additional real estate in Vancouver, or get ahead on expenses such as:
– Pay down or pay off your debt
– Renovate your home for future increased sale value
– Pay for unexpected expenses (such as medical bills, uninsured accidents etc)
– Invest in your child’s university education
– Provide a down payment for property for your child who is just starting out
– Allow you to take that dream vacation you always wanted
The uses of the funds available to you through a reverse mortgage are truly limitless.
What are the Obligations of a Reverse Mortgage?
You will be expected to keep your property maintained for future resale, as well as pay your property taxes and keep up on your property insurance.
How Much Am I Eligible For With a Reverse Mortgage?
Your eligibility – in terms of amount, is dependent on your age, the age of your spouse, the value of your home, and the type and location of your property.
What Are the Risks of a Reverse Mortgage?
As long as you attend to the aforementioned obligations, there are really no risks involved in a reverse mortgage. You have earned the money you have paid into your property, so as far as financial institutions are concerned – lending against such a safe bet is well deserved.
If you are looking to purchase another home or investment property for your child in Vancouver, a reverse mortgage might be exactly the solutions to do so, and when you’re ready to buy – I’m here to help!