Ready to Retire? Here’s How A Reverse Mortgage Can Help.

It’s déjà vu for the Canadian economy. As the price of oil slips and the unemployment rate raises, it is starting to feel a lot like 2008. The China economic collapse along with the Greek debt crisis are all contributing factors to less money in your pocket. Unfortunately for you, all of this is happening when you are finally about to retire. However, there is a solution to consider: Reverse Mortgages.

Reverse mortgages are often misconstrued, but they are actually a great choice for certain people. Here’s how they work. Depending on your age, where your home is located, and what type of home you own, it is possible for you to have access up to 55% of the value of your home. For once, older is better because the older you are, the more you can access. Unlike a traditional mortgage, there are no restrictions on credit or income to qualify. In a reverse mortgage a homeowner is not required to make any monthly payments, not even interest payments. In fact, no payments are due until your home is no longer a primary residence. Reserve mortgages allow retirees to smooth out their income overtime, and allows for pension benefits which are TAX FREE. The money can be taken all at a single time or in monthly allowances, you can decide how the money should be received accordingly.

Take for example the following situations:

1. Evan retired a few years ago and has been living on his CPP and OAS income. His heater breaks down and needs to be replaced. He inquires at the bank only to find out that he does not qualify to borrow given his income status. The solution? Evan takes out a reserve mortgage and gets a cushion for his account. He replaces the broken heater, pays his other debts and is able to live comfortably. The money he received is tax free and Evan continues to get his full CPP and OAS income from the government. He can stay in his home for as long as wants.

2. Rebecca has been saving for quite some time now and thought she had enough retirement savings to allow her to live comfortably. The economy takes a plummets and her investments have taken a hit. Rebecca gets a reverse mortgage in place and can leave her investments to recover and grow while not having to worry about her finances.

Think about the benefits! You can:

• Travel
• Purchase a new home
• Invest or allow your investments to grow
• Reduce debts
• Purchase gifts for family
• Make home renovations
• Live comfortably
• Cover unexpected expenses

There is the assumption that reverse mortgages will cause the loan balance to exceed the value of the home. However, research has shown that 99% of reverse mortgage holders still have roughly 50% of equity left in their home when they are ready to move out. Homes generally grow much faster than the interest accrued on the home. Your home is your biggest asset, use it to your advantage and retire comfortably. Contact us at 403-831-7869 or info@aclendinggroup.com to get started on your reverse mortgage today!