Reverse mortgage is a financial programme that was designed for senior citizens that are above the age of 62 years. It works in an interesting way that enables home owners to borrow equity .The lender under reverse mortgage makes payments to the borrower, with payments being made either as; Lump sum, monthly as long as the borrower occupies the home, periodic advances through a credit line or a combination of all of them. Find out more here.
There are several benefits of reverse mortgages;
Loan repayment is not required as long as you live in your home.
The mortgage enables you to turn equity into cash. As long as you live in your house no payments are due. The loan balance is likely to increase over time and becomes paid off once you leave your home permanently. However, there is the option to pay entirely or partially any reverse mortgage balance without a penalty.
Your home ownership is fully retained.
Even after taking a reverse mortgage the control and ownership of your home firmly remains in your hands. All the responsibilities and benefits that come with home ownership are retained by you, meaning that you will still continue to pay property taxes and homeowners insurance. You too importantly can choose to sell your home and receive 100% of any equity once the loan is fully repaid.
As Long As You Live in Your Home Funds Are Tax Free.
you receive tax free funds because the funds that are from a reverse mortgage are usually based on the equity in your home hence not regarded as earned income
The Insurer is the Federal Government
Government insured mortgages are known to be pretty safe and secure, hence no chance of being foreclosed in the event that you fail to make monthly mortgage payment as no payments are required. For more information, click here.
The method of receiving fund is efficient.
You can customize a payment plan that you think suits you best. For example a single lump sum cash payment or a monthly cash advance.
The Homeowner and the Heirs are protected
In the event that the housing, market declines then your family and your heirs are protected. If it happens that the valuation of your home is greater than the loan, you and your heirs receive 100% of any equity after the loan is repaid.
for more info check out the Canadian reverse mortgage offices.