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. A reverse mortgage allows you to convert as much as 55 percent of your home’s value into cash without any tax liability. When you receive that money, you can use it however you choose: paying off other debt, paying for your child or grandchild to go to college or to take your spouse for that safari you’ve always dreamed of. You still own the house, and you don’t have to make payments each month — as long as you live in that house. If you decide to move out, the mortgage becomes due, whether you sell the property or not. The safety feature is that the lender guarantees that you would never have to pay more than the fair market value of the property, which protects you if property values plummet. If the home gains value, you get to keep the profit.
There are some restrictions for reverse mortgages in Saskatchewan. You have to be Canadian, own a home and be 55 years of age or older. If you’re married, you both have to be at least 55. In addition to your age, a potential reverse mortgage lender will consider the appraised value of the home, its location and condition, the equity you currently have, and the type of structure (detached, condo, etc.).
You might be wondering why so many Canadian seniors are going after reverse mortgages. By the time you reach this point in life, if you have owned a home for several decades, your biggest possessions are going to be the money you have accrued in savings, as well as the equity you have amassed in your home. Most homes tend to go up in value as time goes by, and so the equity that you have may well be impressive by this time. However, all the equity in the world doesn’t come in handy when you have the chance to take that round-the-world cruise (or need money to supplement your grandchildren’s scholarship money), because it isn’t liquid. Reverse mortgages in Saskatchewan help you get the benefit of some of that money you’ve been socking away into your house for decades.
Many people who seek out reverse mortgages in Saskatchewan start out with the loan but then decide to move elsewhere, either into assisted living or into a different house. If you do that, you could sell the existing house and pay back the reverse mortgage with the proceeds, or if you have enough savings you could satisfy the reverse mortgage and keep the house.
Are you 55 or above? Could you use a liquidity boost? Contact us today to see if you qualify for a reverse mortgage.