The writer is a reverse mortgage broker in Canada. He specializes in reverse mortgages to help seniors life their life in dignity. Reverse mortgages can greatly assist the elderly in living their lives to the fullest.
Consumers can choose how to receive the money from a reverse mortgage. The options, include a lump sum, fixed monthly payments for life, a line of credit, or a combination of the above. The most popular option-chosen by more than 60 percent of borrowers-is the line of credit, which allows consumers to draw on the loan proceeds at any time. The size of the reverse mortgage depends on age at application, loan type, home value, and-sometimes- Location.
In general, the older the consumer, the more valuable the home, and the lesser the amount owed, the larger the reverse mortgage will be.
The costs associated with getting a reverse mortgage, include the origination fee (which can be financed as part of the mortgage), an appraisal fee, and other charges similar to those costs for regular mortgages. One of the most confusing fees involved is the mortgage insurance premium. Seniors are usually flabbergasted when they find the amount is 2 percent of the appraised value of their home.
Couple that cost with a loan origination fee and standard closing costs, and a borrower can easily spend $6,000 to borrow $319 a month for life. Why, you ask, should a senior who owns his or her home free and clear have to pay for mortgage insurance? Unlike typical mortgage insurance that protects the lender if the borrower defaults, mortgage insurance on a reverse mortgage ensures the borrower (or the borrower’s estate) will never owe more than the value of the home. That means other assets will never be used to repay the mortgage if the home’s value turns out to be less than the loan balance. The new reverse mortgage is a non-recourse loan, and the mortgage insurance guarantees that component.
A brokers mortgage in canada can fine tune the mortgage product for you. An expert mortgage broker is essential to understand your Vancouver mortgage options.