Frequently Asked Questions About reverse mortgages

FREQUENTLY ASKED QUESTIONS
About Reverse Mortgages

A reverse mortgage from HomEquity Bank is a smart way for seniors to access the equity they’ve accumulated in their home as tax-free cash. Despite the fact that reverse mortgages have been in Canada since 1986, there is still a lot of misunderstanding. Here we address some commonly asked questions.

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.

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.

What if the homeowner has
an existing mortgage?
Many of our clients use a reverse mortgage to
pay off their existing mortgage and debts.

Will the homeowner be eligible
if they have no income or poor
credit?
Yes! Credit score or income verification is not
required to qualify for a reverse mortgage. The
amount of money the homeowner is eligible
for is based on age, spouse’s age, location
of the home, type of home, the amount of
secured debt, and the home’s appraised value.
Some restrictions may apply.