Reverse Mortgage Misconceptions

I Love Edmonton Real Estate
I Love Edmonton Real Estate
Reverse Mortgage Misconceptions

Our guest today is Elena Russell, BSc, PFP, FMA. Elena is a Business Development Manager with Home Equity Bank in the Edmonton South Region. She is here to talk about Reverse Mortgages and the misconceptions people have about them.

[0:20] What is a Reverse Mortgage?

  • In Canada, a Reverse Mortgage is first charge and you retain ownership.
  • We can lend 55% to maximum value of property and it leaves equity in the home
  • The minimum age to qualify is 55 and typical approval is 25%.

[2:12] Why get a Reverse Mortgage?

  • If you are struggling to make payments and working multiple jobs to keep up, it allows retirement, avoiding of care facilities, and to maintain a certain lifestyle during market lows.

[5:05] What kind of demand are you currently seeing?

  • We are receiving more phone calls and engagement as people are at home due to the pandemic.
  • People are discovering that if they lose their job they can’t qualify with traditional lenders.

[9:06] With a Reverse Mortgage, you can choose to make payments?

  • There are no requirements, but you can make interest payments and are allowed to make 10% payment towards the principle.

[10:40] What impact is the grey divorce rate having on your clientele?

  • There has certainly been an increase. You can utilize a reverse mortgage for spousal buyout.

[12:09] Are you able to put a Reverse Mortgage on a property you are buying?

  • You could potentially blanket both properties if you are keeping your home.

[14:33] What are some of the current reasons people are getting Reverse Mortgages?

  • Due to COVID-19, people are looking at financially helping out their children more.

[15:31] Are there situations that a Reverse Mortgage doesn’t make sense?

  • If the applicant is still working full time, able to make payments and qualifies for a Home Equity Line of Credit.

[16:40] Do you have any final comments?

  • Unlike in the US, in Canada you will not lose ownership of your home and you will never owe more than the property is worth.