Canada's Mortgage Experts
Common false assumptions on reverse mortgages
November 12, 2019 | Posted by: Aaron Baxandall
- We will lose ownership of our home as the Bank will now own our home. This is not true. Just like with any other mortgage, the home is used to secure the loan which means that HomeEquity Bank is registered as a standard charge on title. A customer DOES NOT transfer ownership of their home to us. In fact, once it’s time to pay back the mortgage they or their heirs have the choice to settle the loan however they want. Selling the home is the most common option, but it is not mandatory.
- There will be no money left for our heirs. This is not true. Over 99% of homeowners have money left over when their loan is repaid. In fact, the total value of the home can appreciate in value, whereas the interest only accumulates on a small value (the borrowed amount) of the home.
- We will owe more money than the house is worth, once we sell. This is not true. At HomeEquity Bank, we have a No Negative Equity Guaranteei , this means that if the home depreciates in value and the loan amount due is more than the sale amount of the property, HomeEquity Bank will cover the difference between the sale price and the loan amount.
- If my spouse passes away, the Bank will make me settle the mortgage and move out. This is not true. Because they are on the title, the surviving spouse will maintain ownership and control of the home. They will never be forced to sell, move or repay the loan, as long as they continue to meet their obligationsii
For more information on reverse mortgages and to see if it is the right fit for you, please contact me for a stress free conversation.