Understanding reverse mortgages in Ontario is easier than most people think. To start, people need to clear up a few misconceptions and understand that these are very similar to traditional mortgages. Of course, there are a few exceptions and these include:
- The big advantage that there are no monthly payments to be made. In fact, this is the kind of flexibility that draws many people to this financial product in the first place. Reverse mortgages are a wonderful product for people looking for financial peace of mind.
- Whereas traditional mortgages are available to every age group, reverse mortgages are specifically geared to people 55 years and older.
Some of the other big advantages include the fact there are no income or debt requirements or credit checks needed to get one of these reverse mortgages. Even though you don’t need to make monthly payments, you should pay attention to the way the interest accrues on a reverse mortgage.
The Most for Your Money
It’s important to keep in mind here that the interest is always being added to the balance of the money that you owe. It’s one of the financial tweaks that come with this particular mortgage and something you need to be aware of to get the most for your money.
Great for Seniors
That interest consideration aside, reverse mortgages are a great product for seniors 55 years and older. Even though the interest rates are accruing with the balance that you owe historically house prices always go up over time.
So, even though older people are paying interest on the balance, their house price is rising. Long story short here is the equity in your place is increasing and you don’t need to make any mortgage payments until you sell.
Understanding reverse mortgages in Ontario and fair market value
One of the other big bonuses to these financial products is the fact the balance owing will never exceed the fair market value of your house. These are an exceptional product for senior citizens who want to tap into the equity they’ve built up without making payments or worrying about losing money.
The length of what’s available as far as these mortgage products go is another advantage. Reverse mortgages are available in an amortization period that suits you.
Understanding reverse mortgages in Ontario usually result in people seeing the advantages to unlocking the equity they’ve built up.
