Apply For Reverse Mortgage
What Is a Reverse Mortgage?
In simple words, a reverse mortgage is a type of loan where the owner of the property who is of the age of 62 years or older and has sizeable home equity that they can borrow against the value of their house and receive the money as a lump-sum either through a fixed monthly payment or line of credit. Unlike a forward mortgage, which is the usual type of loan to buy property, a reverse mortgage does not require the owner of the house to make any loan payments; instead, the entire loan amount becomes due and payable when the borrower sells the home, moves away, or dies.
Baking regulations require lenders to structure the mortgage so that the amount does not ultimately become bigger than the property’s value. If the value of the loan is more significant than the home’s value, the borrower, including the estate, will not be held responsible for paying the difference. The only way the situation mentioned above can happen is if the borrower lives for a long time or if there is a dip in the property’s value. For further enquiries on a reverse mortgage, please do not hesitate to reach out to the team at Harpreet Puri Mortgage to schedule an appointment.
How It Works
Why should you choose a reverse mortgage?
A long-term solution
If you own a home, you qualify for a reverse mortgage. As a borrower, you must have significant equity in your property. The mortgage will leave you with a lump-sum monthly payment or a line of credit after paying off your existing mortgage balance. With the help of Harpreet Puri Mortgage, you can get quotes from various lenders. They can advise and educate you if it is a good idea to provide a long-term solution to the problems you are experiencing financially.
If you decide not to move away
If you take out a reverse mortgage, you should ensure that you live in your house for the foreseeable future. This type of mortgage comes up with high up-front costs. Depending on the value of the house, the origination fee can be as high as $6000. There are also closing costs such as title insurance, home inspection, and home appraisal costs. If you are deciding to move away from your house, this is the right mortgage option. Moving your home with a reverse mortgage will lead you to repay your mortgage, or worse, leave you homeless.
If you can afford ongoing costs on your home
If you choose to have a reverse mortgage, you have to ensure you keep up with your property taxes, homeowners’ insurance, and maintenance expenses. If you do not pay the costs mentioned above, the lender’s collateral will be at risk. Your lender does not want to get stuck with a property that is not nearly what you owe on the reverse mortgage.
If you are 62 years or older
It is the best type of mortgage if you and your spouse are 62 years or older. The older your spouse, the more proceeds on your reverse mortgage, you can borrow a high amount. Additionally, it is also the only way to access the home equity without selling the property. To find out more information, please do not hesitate to speak to our team at Harpreet Puri Mortgage to find out more details on prospective reverse mortgage lenders and how the value of the proceeds changes as you get older.
How to get the best interest rates for a reverse mortgage?
How to get a reverse mortgage even with a bad credit score?
The major benefit of applying for a reverse mortgage is that the borrower does not need to get a good credit score to qualify. The below-mentioned reasons explain how to get a reverse mortgage with a bad credit score:
Borrowers must have equity in their house to qualify for the mortgage. This means they will either need to have an existing mortgage balance that can be paid off with a reverse mortgage or purchase the home outright. The value of a reverse mortgage loan should not exceed more than 80% of the house.
House owners must continue to regularly pay the taxes and insurance on their property when they have a reverse mortgage. If they don’t pay the loan on time, it can default, leading to late payment fees.
The borrower must be the owner of the home. If the owner of the property moves to a different house for more than 12 months, the homeowner is no longer eligible for the reverse mortgage, and the loan will be required to be paid in full.
Advantages of using a mortgage Agent for a reverse mortgage:
- Saves you the legwork from running around and speaking to various lenders.
- Better access to get you the best interest rates with contact from various lenders.
- A mortgage agent will manage your property’s origination fees, application fees, and appraisal fees.
- Expertise in the mortgage market.
For further information on a reverse mortgage or to schedule an initial consultation, call Harpreet Puri Mortgage today at 416 543 9000. We are based in Brampton and offer our services to clients all over the country.