From home equity lines of credit (HELOCs) to refinancing your mortgage, there are several unique ways you can leverage your home and reach your financial goals. Even as you get older, you can use your home to help support your retirement.
While you can tap into the income provided by your RRSP, Canadian Pension Plan, and Old Age Security pension, these might not be enough to fund the life you want to live. A reverse mortgage can help manage some of these costs just by utilizing the value of your home.
In the simplest terms, a reverse mortgage is a loan you can get based on the value of your home. In some cases, you can borrow up to 55% of your home’s value! Reverse mortgages are available to homeowners 55 years and older, and the amount you receive is based on:
- Your home’s appraised value
- Your age
- Your lender
If your reverse mortgage application is accepted, you may choose to receive your loan as one lump sum or in periodic payments. From here, you can use this money however you see fit, and you won’t have to pay back or make any payments on the reverse mortgage until:
- You sell the home
- You move out of the home
- The last borrower passes away
- You default on the loan