Reverse Mortgage Vancouver BC Canada - Information on Reverse Mortgages In British Columbia
The Mortgage Group Canada Inc.

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  What are the pros of a reverse mortgage?

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  No payments are due as long as you live in the home
  Access to funds you need
  Easy Qualifications
  Retiree is able to get money out of home to live on and remain in the home
  Income and credit score doesn't matter so it is easy to qualify

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  What are the cons of a reverse mortgage?

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  Higher interest rates
  Limited Amounts can be borrowed
  Costs of Mortgage

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  Of course, this is a loan meant for individuals who do not have enough money to live on day to day. 

  What is a Reverse Mortgage?

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  A reverse mortgage is simply a loan that is available to seniors against your equity in the home. The biggest aspect of this loan is that you do not need to make any monthly payments to repay the loan throughout your lifetime. The loan repayment is deferred until the death of the borrower, except in some special circumstances. But this option is available only to seniors, and you need to be at least 60 years old to avail a reverse mortgage on your home.

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  How Much Money Will You Qualify for?

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  There are several factors that determine how much money you will qualify for through reverse mortgage. Your age and the appraised value of your property are the most important of these factors. As you grow older, the amount that you qualify for increases. For example, a 70 year old will qualify for a higher loan percentage than a 60 year old. Similarly, as the value of the property goes up, the maximum loan amount also goes up. However, the loan amount can never exceed 40% of the value of your property, and there are also absolute upper and lower limits to this amount.

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  What Happens When the Value of the Home Appreciates or Depreciates?

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  One of the biggest advantages of a reverse mortgage is that at any time you will only owe the lower of the two - the loan amount (with interest) and the value of your house. This means that there will never be a situation where you owe more than what your house is worth. On the other hand, if the value of your house rises, you will enjoy the full benefit of that capital appreciation.

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  How is the Loan Repaid?

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  As long as you are staying in your home, you do not have to make any repayments on the loan. If you move out of your house or plan to sell it, you would need to make the repayment in full, including interest and pre-payment penalty.
  If the borrower does not sell or move out of the house, the loan repayment only needs to be made after his or her death. If a prior arrangement has been made, the heirs can choose to pay off the reverse mortgage. Otherwise, the house is sold off, and after settling the loan amount and accrued interest, the balance is paid to the heirs.
  In summary, a reverse mortgage is a great option if you want to unlock the value of your home and want to use the cash without having to sell your house. Although you would now have a good enough idea of how does a reverse mortgage work, do not forget to study all the terms and conditions in detail before you enter into a reverse mortgage contract.
  
  Seek independent financial and legal advice.

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  Many reverse mortgage providers require you obtain this advice before signing up. Depending on your circumstances, taking out a reverse mortgage can impact on your pension entitlements. 
  
  Some reverse mortgages have detailed default clauses and it is important to understand these before entering into a reverse mortgage.

   

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