Unlock Your Home's Value
A reverse mortgage can provide financial flexibility in retirement by converting your home equity into tax-free cash. This guide explains everything you need to know to make an informed decision.
1 Determine Eligibility
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Age requirement
At least 55 years of age (all borrowers on title must meet this requirement). -
Primary residence in Canada
Property must be your principal residence in Canada (available in Ontario). -
Significant home equity
Mortgage should be mostly or fully paid off with substantial equity built up. -
Property type qualification
Single-family homes, townhouses, and some condos qualify (must meet lender criteria).
2 Pre-Application Assessment
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Meet with mortgage specialist
Discuss your goals and determine if reverse mortgage is right for you. -
Assess property value
Home appraisal usually required to determine available funds. -
Review maintenance ability
Must maintain property taxes, home insurance, and property upkeep. -
Understand payment options
Learn about lump sum, monthly payments, or line of credit options.
Important Consideration
Reverse mortgages are complex financial products. Take time to understand all terms, costs, and implications before proceeding. Independent advice is highly recommended.
3 Application Materials
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Proof of age and ID
Government-issued photo ID for all homeowners on title. -
Property deed or title
Legal proof of property ownership and mortgage status. -
Property tax statements
Recent tax assessment and payment history. -
Home insurance policy
Current policy showing adequate coverage. -
Property appraisal
Professional appraisal to determine current market value.
4 Financial Planning Review
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Calculate available funds
Determine how much you can access based on age, home value, and interest rates. -
Review interest rates and fees
Understand all costs including setup fees, ongoing charges, and interest rates. -
Consider impact on estate
How will this affect inheritance and estate planning? -
Explore alternatives
Consider downsizing, HELOC, or other financial options. -
Discuss with family
Include adult children or beneficiaries in decision-making process.
Financial Planning Note
Interest compounds over time, reducing your equity. Consider how long you plan to stay in the home and your overall retirement financial strategy before proceeding.
5 Understanding Payment Options
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Lump sum payment
Receive all available funds at once for major expenses or investments. -
Monthly advance
Receive regular monthly payments to supplement retirement income. -
Line of credit
Access funds as needed, paying interest only on amounts used. -
Combination approach
Mix of lump sum, monthly payments, and credit line options.
6 Important Considerations & Risks
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Interest rate impact
Understanding how compound interest reduces your equity over time. -
Property maintenance requirements
You must continue maintaining the property and paying taxes/insurance. -
Reduced inheritance
How this affects what you can leave to heirs. -
Moving or selling considerations
What happens if you need to sell or move to care facility. -
Government benefits impact
How additional income might affect pension benefits or other programs.
Risk Management
Reverse mortgages are not suitable for everyone. Ensure you can afford ongoing property costs and understand the long-term implications for your financial security and family.