A Canadian Reverse Mortgage is when you borrow money against your home's equity. But here you do not have to make any payments until the home is sold to another person and once the home is sold, the lender will get back the principal you borrowed plus interest for the time of the loan period. This can help elderly homeowners through hard financial circumstances. A reverse mortgage ends when the house is sold or the mortgagee dies, this might be a perfect option for a senior that doesn't have any children because what's the point in having a paid-off house in your estate if there isn't anybody to enjoy it after your demise? A reverse mortgage is basically a financial transaction between you and the mortgage company. You offer the mortgage company a considerable amount of money in interest, and in return they give you an amount of cash up front. The factor of disappointment in this deal is for the people who are hoping to inherit from your estate. (CHIP) is the only mainstream reverse mortgage option currently available in Canada. CHIP has approximately 6,560 reverse mortgages outstanding.
There are a lot of possibilities for the reverse mortgage deals to be profitable for the lender than the buyer and so you need to be very careful before getting involved into Canadian reverse mortgage deals. Basically there are three types of reverse mortgages to choose. They are:
– Proprietary reverse mortgages.
– Single purpose reverse mortgages.
– FHA Home equity conversion mortgages.
Proprietary mortgages are private loans provided by the companies that market them. Some state and local government entities and nonprofits offer single-purpose reverse mortgages. They are usually low-cost loans. They are generally available only to people with low or moderate incomes. There are certain restrictions in spending the money obtained from a Single purpose reverse mortgage. They can only be used for specific purposes, such as home repairs, improvements or property taxes. According to the National Reverse mortgage foundation, federally insured home equity conversion mortgages, or HECMs, provided by the U.S. Department of Housing and Urban Development, or HUD, account for 90 percent of all reverse mortgages.
A Canadian reverse mortgage can be helpful in many ways. Your savings can be boosted by using the money in other investments like vehicles, real estate and so on. The financial assistance from Canadian reverse mortgages will also help you to face unexpected expenses. You can improve your lifestyle and can lead a secured life on your own.
Â The author of this article has expertise in Reverse Mortgages Canada. The articles on Canadian Reverse Mortgage reveals the author’s knowledge on the same. The author has written many articles on Canadian Reverse Mortgages as well. Â Â