Although Reverse Mortgages have received a tainted reputation based on the practices of our neighbours south of the border, the Canadian implementation is very different. First of all you are keeping the title to your home and secondly you get to stay in your home until you are running out of retirement. You cannot and will not be evicted!
Tapping into the real-estate value of your property is the perfect way to increase your monthly cash flow – tax free, so you can enjoy the lifestyle you had when you were working.
Another way to use your real-estate wealth is to pay for the senior nursing needs for yourself, your spouse, or if you are the child of a senior for the health needs of your parents without using your own financial resources. A move to seniors’ home is not always necessary; you get to stay in your own home where you know your way around in a familiar environment.
Perhaps you would like to use your accrued real-estate equity to purchase a vacation home that you can use for yourself and the family, and spending those precious weekends and vacation days in the midst of your family and the grand-children.
Some of our clients have purchased an investment property in order to create additional income, in form of a rental condo or home, which in turn can increase its value in the rising real-estate market, particularly in the Lower Mainland.
As real-estate prices in the Vancouver metropolitan area and around Victoria have been rising significantly and appear to continue to do so, it is harder and harder for your children and grand-children to save for the required down-payment for the purchase of a home for themselves. A reverse mortgage can help to provide a down-payment gift, which you will be able to enjoy together with them.
Think of a reverse mortgage of another form of a Line of Credit. Your bank may have denied your application for a Line of Credit, because of your limited pension income. A reverse mortgage will provide you with a tax free income stream without the requirement of monthly payments. This way you will have additional funds available to yourself and still keep your home, which in turn can gain in value, leaving your children with a sizable inheritance.
Lets have a roundtable discussion together with your children and explore the income option of a reverse mortgage over and above the option of a traditional Line of Credit.