|
|
|
|
Legal Line® provides Free legal information to through its website, telephone and fax-on-demand systems.
1,000 topics are covered within 35 areas of law...
Search...
Ontario|Seniors LawSeniors Law 729 What is a Reverse Mortgage? A reverse mortgage is a financial tool that allows homeowners to access the money they have invested in their homes. It allows homeowners who have little or no income to continue living in their home while they use their property as a source of income. A reverse mortgage can only be obtained by a homeowner who is at least 62 years old and whose home is entirely paid for.
- How it works
A reverse mortgage is a good option for homeowners who need cash to pay for living expenses, but who do not have liquid assets. With a reverse mortgage, a percentage of the value of the home is converted to cash and is used to purchase an annuity, which provides the homeowner with a guaranteed income. The cash advance is registered against the title of the home as a mortgage, but no mortgage payments need to be made. The money from the reverse mortgage can be paid in a lump sum or in regular monthly installments.
With a reverse mortgage, the bank will pay the homeowner cash. After the homeowners' death, the home will be sold and the bank will collect the mortgage amount plus interest. Any money that is left over after the home is sold and the bank is paid will be available to the beneficiaries or dependents of the homeowner. You can obtain more information about reverse mortgages from an Investment Advisor or from a bank.
|