Straight Talk About Reverse Mortgages from Bloom, a Canadian Reverse Mortgage Company

For most people, it’s no secret that the money you bring in dwindles after you retire, so senior borrowers have only a few options…the good news is that the requirements for a loan reverse mortgage are basic.

Speaking of a impending recessionit’s no wonder borrowers in need of funds consider using their houses as a source of income.

Yet despite their growing popularity, Bloom, a Canadian provider of reverse mortgages, reports that there are still common misconceptions about reverse mortgages implying that they only hurt old people. But this is not true. Like any other financial product, a reverse mortgage has advantages and disadvantages.

It is not the last resort.

The problem with reverse mortgages in Canada is that they are often seen as a last resort. But you don’t have to wait until you’re in dire financial straits to tap into the equity in your home.

With a reverse mortgage, you can borrow money against the value of your home (capped at 55%) without having to sell it. To be eligible, you must be an owner and at least 55 years old.

The best part about it is that you don’t have to make regular principal or interest payments, so why not take advantage of that hard-earned capital to relieve some financial stress?

Until you move, sell, or die, you don’t have to pay that money back, which is one of the best ways to avoid taking on more retirement debt.

It’s certain.

Reverse mortgages in Canada are strictly regulated, like traditional mortgages, which means provincial and federal regulations protect borrowers.

For example, earlier this year, The Office of the Superintendent of Financial Institutions (OSFI) updated the rules governing various home loans, including reverse mortgages, to ensure that lenders and borrowers can meet their obligations.

Ultimately, every homeowner considering a reverse mortgage should consult with an independent attorney.

With rising house prices in Canada, it’s very unlikely that you’ll ever owe more than the house is worth. However, if this happens, the home equity warranty ensures that your debt is limited to the fair market value of your home, provided you meet your obligations under the mortgage agreement (such as paying property taxes and home insurance).

It can bring peace of mind.

For example, a home equity line of credit (HELOC) requires an income stress test, which many retirees do not qualify for. Other types of loans, such as personal loans, lines of credit, and credit cards, also have income requirements. The good news is that the requirements for a reverse mortgage are basic, i.e. the lender wants to make sure you have enough resources to meet their home obligations, such as taxes and insurance. . The location, type and condition of the home, the assessed value of the property and the age of the borrower are used to determine the amount you will receive.

Also, since you don’t pay tax on the money you borrow, it’s not considered income, so it does not affect government benefitssuch as your Old Age Security (OAS) and your Guaranteed Income Supplement (GIS).

When you look at the other popular alternatives, such as selling your home, downsizing, renting, or moving into an assisted living facility, they all involve moving, which is just an option for some. . Ultimately, a reverse mortgage allows you to finance your lifestyle while staying in your home.

The idea that there may be less money in your estate to bequeath to your children or other beneficiaries can be difficult, but it is also difficult to make ends meet or to be forced to sell a house that you are not ready to leave.

If you’re still debating whether to use your home equity to access financial assistance, ask your lender questions to make sure you understand how it works and how it can affect your home equity. over time. before applying.

Could a reverse mortgage be the right solution to manage your retirement budget?

Visit to learn more about reverse mortgage solutions for Canadians aged 55 and over.

This article is provided for general information only. Seek independent advice for your personal financial decisions.

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