What’s a Reverse Mortgage?

A reverse mortgage is a unique borrowing solution designed specifically for homeowners 55+ who would like to remain in their home while also being able to access some of its equity without having to make regular payments. All other lending products on the market today that enable homeowners to tap into home equity – such as a home equity line of credit or mortgage refinance – require regular payments. Borrowers must also qualify based on their income and credit score. With a reverse mortgage, you can access up to 55% of the value of your home and your credit is rarely a factor. You have the option of taking out less equity even if you qualify for the maximum amount.

How Does a Reverse Mortgage Work?

A reverse mortgage enables you to access up to 55% of your home’s equity tax-free to use however you choose. Your current pension or other income is not impacted (including Old Age Security and Guaranteed Income Supplement). In order to determine if you’re eligible to receive a reverse mortgage, your provider will look at your age as well as the age of your spouse (if applicable), your home’s location and value, and your property type. With a reverse mortgage, you’ll always retain control over your home, which means you’ll never be forced to sell. You must, however, continue to maintain your property and pay the taxes and insurance. You’re only required to pay back the loan when you decide to sell or if you leave your home. And the reason access to your home equity is capped at 55% is to ensure your balance owing on your reverse mortgage doesn’t exceed the home’s fair market value.

How Do I Qualify for a Reverse Mortgage?

If you and your spouse are both 55+ and own your home, you may be eligible to access up to 55% of your home’s equity in tax-free cash. Qualification relies on a number of factors concerning your home, including it’s value, location and property type.