Reverse Mortgage.

As mentioned above, a reverse mortgage is a mortgage that does not have scheduled payments. In other words, homeowners do not make mortgage payments towards this reverse mortgage. Naturally, as a result, the reverse mortgage is not on a fixed repayment schedule, often referred to as an amortization schedule. Instead, the principal balance grows along with the interest that compounds during the term of the mortgage. In other words, the balance of the reverse mortgage continues to grow for as long as the mortgage is outstanding, until such time the mortgage is repaid. A reverse mortgage does not affect your Old Age Security or Guaranteed Income Supplement benefits. Homeowners age 55+ can access to up to 55% of the value of their equity, depending on the property type, condition appraised value and most importantly the age of the homeowners. The homeowner’s age will determine the maximum qualifying ‘loan to value’. In other words, the younger the homeowner, the less they can borrow. Whereas, the older the homeowner, the more they can borrow provided the loan to value does not exceed 55% of the appraised value of the property. Interest rates typically exceed interest rates for a traditional mortgage or home equity line of credit, however, the surcharge is a result of the flexibility and simplified qualifying process compared to traditional mortgages, especially when traditional mortgages are not available due to the homeowners income at their age and stage of life, for instance, those retired and unable to pass the mortgage stress-test with a traditional mortgage lender. Funds are typically provided in two different manners: as one lump sum advance to the homeowner or multiple advances over time.