Liquidity can be a real concern for senior citizens in Canada. The reality is that fixed incomes often fail to keep up with the rising cost of living, and as a result, you can end up falling behind bills — or simply living at a reduced standard — while surrounded by a huge pile of money that you cannot access.
What is this pile of money? The equity in your home. Reverse mortgages in Manitoba are available to anyone who is 55 years of age or older and owns his or her own home, and they can provide much needed cash flow to retirees. In Canada, you can convert up to 55 percent of the value of your home into cash without any tax liability. Once the money comes in, you can use the money in any way you see fit. You can pay off high-interest credit cards. You can pay for that trip to Tahiti. You can send your cousin’s daughter to college. Even after you take out this reverse mortgage, you’re still on the deed as the home’s owner
If you are 55 years or older and own your own home — and you have enough equity — a reverse mortgage can be a lifesaver in terms of cash flow in your senior years. Reverse mortgages in Manitoba let you turn up to 55 percent of the value of your home into cash, and you won’t owe the government a red cent of taxes. You still appear on the deed as the owner of the home, but you never have to make a single monthly payment as long as you remain in that house. If you move out, such as in moving to assisted living or deciding to live somewhere more tropical, then you have to pay back the principal with interest. However, the lender guarantees that you will never have to pay more than the fair market value of the property at the time of sale, which protects you if the bottom falls out of the real estate market. Should the value appreciate, the profits are yours to keep.
To qualify for reverse mortgages in Manitoba, you have to be from Canada, you have to own a home, and you have to be at least 55 years old. Married? Your spouse has to be at least 55 as well. Reverse mortgages in Manitoba only come after a lender has looked at the appraisal value of the home, its location, its current condition, your equity in the home and the type of dwelling that it is (condo, detached, and so on).
So why are these mortgages so popular? More and more seniors are finding that the “nest egg” they thought their house would become for them is something they should access for themselves instead of leaving it to the next generation. Most houses gain in property value over time, and so there is even more equity in homes than what people have paid in, and that equity makes more money available through a reverse mortgage.
Just because you take out a reverse mortgage in Manitoba doesn’t mean that you have to live in that place forever. Many people start the notes out but then move into assisted living. Others decide to move to a smaller place, closer to their kids. At that point, they pay back the existing principal and interest, either by selling the house or using other forms, and then move on.
Are you at least 55? Does this sound like a solution that could work for you? Contact us today to see if you qualify for a reverse mortgage.