The Benefits of a Reverse Mortgage in Canada

As reverse mortgages become more and more popular in Canada, many are wondering what they are exactly, and if they’re a safe way to borrow. Many people also confuse these with home equity loans or second mortgages, but they work vastly different from each of these types of loans. So just what is a reverse mortgage, who’s eligible for one, and what are the benefits?
A reverse mortgage is a loan available for seniors who have quite a bit of equity in their home. These loans allow for these seniors to borrow against that equity, just as they would with a home equity loan. The huge difference however, is that the homeowner never has to repay the loan as long as they continue to live in their home. The money the homeowner receives from the loan can be used for anything from a dream vacation to a home renovation, or anything in between. The money received from the reverse mortgage can also be given in one lump sum, or through a number of smaller payments over time.
Another very big difference between reverse mortgages and home equity loans or second mortgages is that with these latter types of loans, an individual must meet certain income requirements before the loan will be approved. However, a reverse mortgage requires no income at all, making them especially good loan options for seniors who are in their retirement years.
The fear of losing your home is always one of the biggest that seniors have, and this is just one more benefit that reverse mortgages bring. Through a reverse mortgage, a homeowner cannot be evicted from their home and they are given the legal right to stay in their home for as long as they choose.
And lastly, homeowners who obtain a reverse mortgage also don’t need to worry about being charged heavy taxes on the revenue obtained from this type of loan. Because the tax on that money has already been paid (by you, the homeowner,) it doesn’t need to be paid again. So you can not only use that money for whatever you wish, but you also don’t need to use any of it to pay back those taxes!
Money you can use for whatever you want, an easy approval process, and a loan that you don’t have to pay back, as long as you stay in your home (which is really what all of us want anyway, isn’t it?) With all of that, it’s easy to see why reverse mortgages are getting such a good rap, and becoming more popular by the day.