What is a Reverse Mortgage?
Reverse Mortgage is a form of a loan secured against the equity of the property one owns. The amount of the Mortgage is mainly determined by taking into account the following:
The Mortgage Balance of the current property and the current Market Value of the home.
Reverse Mortgage will allow clients to defer payment of the loan until they die, sell, or move out of the home.
How does Reverse Mortgage work?
When you apply for a Reverse Mortgage the amount approved will be given to you on a lump sum. There are no monthly payments on the loan but the interest is added monthly to the loan balance each month.
The amount of loan will depend on many factors such as Value and location of property, Age of the applicants, Current interest rate etc. A Reverse Mortgage can be set it up for the client to receive such funds as a lump sum, as an annuity, line of credit or any combination.
When applying for a Reverse mortgages, the applicant will have to bear the following expenses: Appraisal fee, independent legal advice, and closing and administrative costs.
Please note reverse mortgages may be a good fit for some seniors, the products aren't for everyone. To find out whether you qualify for a Reverse Mortgage, talk to one of our Mortgage Agents.