Many worry that someone could step in and take over ownership of their home, and have ongoing concerns about owing more money than your house is worth. This is due to the interest charged on the money you have borrowed, and there may be fears that if one spouse dies, the other will have to move out.
None of this is true, however. And these unwarranted concerns likely play into the reasons why Canadians have been hesitant to embrace this product.
The fear of moving to a retirement facility and the personal disruption that can go along with moving out of the family home is real, and the pandemic has alarm bells ringing for cash-strapped Canadians looking to find ways to stay in their home during their golden years.
Along with this are concerns over funding retirement. Canadians are living longer and with that comes higher costs for home renovations, possible living assistance, home maintenance and higher costs in general.
With home prices escalating and Canadians aging, the reverse mortgage is now being looked at more closely as a retirement funding strategy. In fact, recent statistics from HomeEquity Bank show the average customer for reverse mortgages is 72 years old, the average mortgage size is $190,000, the average loan to value is 30 per cent, with an average credit score of 740.
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