Frequently Asked Questions

Do you have a lot of questions about reverse mortgages? You're not alone. There is a lot to learn about these loans and if you're not well-informed about them, you could make a decision for the worse. Prevent losing money and start living in the home you love. You can get started by learning more about reverse mortgages. Here are the most frequently asked questions about them for your information

What is a Reverse Mortgage?

A reverse mortgage is a loan you take out against the value of your home. Reverse mortgages are designed exclusively for people ages 55+. A reverse mortgage is also known as an equity release. It provides a tax-free cash loan of up to 55% of your home’s value, meaning you can gain financial freedom without having to downsize or go through the hassle of selling your home. At Our Reverse Mortgage, we offer two specific options for Canadian homeowners: the Income Advantage Plan and the CHIP Reverse Mortgage.

How does a CHIP Reverse Mortgage work?

A CHIP Reverse Mortgage is secured by the equity in your home. Unlike a traditional mortgage in which you make regular payments to someone else, a reverse mortgage pays you. The big advantage with the CHIP Reverse Mortgage is that you do not have to make any regular mortgage payments for as long as you or your spouse lives in your home. That’s what has made reverse mortgages such a popular solution in Canada, the U.K., the U.S., Australia and other countries.

Who is it for?

The CHIP Reverse Mortgage is designed exclusively for homeowners age 55 and older. This age qualification applies to both you and your spouse.

How much can I get and how is it calculated?

You can receive up to 55% of the value of your home. The specific amount is based on your age and that of your spouse, the location and type of home you have, and your home’s current appraised value. You can contact me and I can quickly give you an estimate of how much you may be approved for.

Is a reverse mortgage right for me?

If you’re ready to start living life on your terms, a reverse mortgage could be the best option for you. When you only have your social security to rely on for income post-retirement, maybe it's time your home worked for you instead of vice versa.

When should I get a reverse mortgage?

A reverse mortgage can only be received when a homeowner reaches 55 years of age. You can always consider a reverse mortgage in the following cases: you want to live in the home you love, your home is facing a foreclosure, or you're suffering from a poor quality of life or your family is doing poorly in terms of health.

How do I receive the money?

You can choose how you want to receive the money. The CHIP Reverse Mortgage gives you the option of receiving all the money you’re eligible for in one lump sum advance, or you can take some now and more later, or you can receive planned advances over a set period of time. Planned advances are available on the Income Advantage product.

Will the homeowner owe more than the house is worth?

The homeowner keeps all the equity remaining in the home. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid. The equity remaining depends on the amount borrowed, the value of the home, and the amount of time that’s passed since the reverse mortgage was taken out.

Will the bank own the home?

No. The homeowner retains title and maintains ownership of the home. It’s required for the homeowner to live in the home, pay taxes on time, have property insurance, and maintain the property in good condition.

What if the homeowner has an existing mortgage?

Many of our clients use a reverse mortgage to pay off their existing mortgage and debts.

Should reverse mortgages only be considered as a loan of last resort?

No. Many financial professionals recommend a reverse mortgage to supplement monthly income instead of selling and downsizing, or taking out a conventional mortgage or a line of credit.

What fees are associated with a reverse mortgage?

There are one-time fees to arrange a reverse mortgage such as an appraisal fee, fee for independent legal advice as well as our fee for administration, title insurance, and registration. With the exception of the appraisal fee, these fees are paid for with the funding dollars.

What if the homeowner can’t afford payments?

There are no monthly payments required as long as the homeowner is living in the home.