Mortgage
- Thread starter spankingman
- Start date
I have heard CHIP is relatively expensive and that a good mortgage broker can find you something way better. Call any one of the hundreds around and see what they can find for you.
Talk to a financial planner (the ones you pay a fee to) amd an insurance broker and a mortgage broker.
Why insurance broker? If you qualify, there a financial strategies to purchase life insurance and place your house as a collateral. You pocket the difference. Do your research as you will most likely only be able to do it once.
Why insurance broker? If you qualify, there a financial strategies to purchase life insurance and place your house as a collateral. You pocket the difference. Do your research as you will most likely only be able to do it once.
Definitely talk with a qualified financial planner. Many people forget that a reverse mortgage is still a loan that must be repaid at some point in time either when you die or sell. If the housing market is as hot as everyone claims it is, just sell the house outright and move to a smaller place.
Here is some reading for you to do:
http://www.fcac-acfc.gc.ca/eng/resources/publications/mortgages/Pages/Understa-Comprend.aspx
http://www.getsmarteraboutmoney.ca/...ate/Pages/Reverse-mortgages.aspx#.VWNxNU-6eUk
Here is some reading for you to do:
http://www.fcac-acfc.gc.ca/eng/resources/publications/mortgages/Pages/Understa-Comprend.aspx
http://www.getsmarteraboutmoney.ca/...ate/Pages/Reverse-mortgages.aspx#.VWNxNU-6eUk
And if today's market is the bubble many think, then selling the house after it bursts may not net enough to pay off the loan.
Yeah, exactly. I have to wonder what people are using the funds for. I'm sure there is a percentage of people that will take it is a lump sum and do dumb things with the money like go on trips, try to purchase an investment property, buy "stuff" for themselves, kids, friends, etc. If a retiree truly has a cash flow problem, a reverse mortgage can make it worse.
Its only a bet worth taking if you're a retiree with no dependents and taking a bet on how long you'll live.
But for that matter, why not just sell while prices are high and rent.
Then you control the capital.
I think the one aspect of a reverse mortgage that makes them appealing to those who get them is staying in their house.
Sure you get to stay in your house, but you are also paying the same property taxes and other expenses. If you can't afford such expenses before taking out a reverse mortgage, having one won't help.
Dave in Phoenix
Well-known member
The main issue in my view (I'm a CFP), is the fairly high costs involved (at least in the U.S.) Some people love their homes and never want to leave until they die. They also want childen to work and be indepedent not just inherit. Many retirees don't have enough savings or investments getting enough from in the U.S. Social Security to be comfortable. Further interest rates in the U.S. are near historical lows, so locking in todays low mortgage rates can make sense.
I have had a number of clients do this and it made a big difference in their retirement enjoyment.
I have had a number of clients do this and it made a big difference in their retirement enjoyment.
You've identified the target market, but you're ignoring their major motivation: They want to stay in their homes as long as they can.
They took the conventional mortgage to get into the house as early as they could, now they'll siphon off the built-up capital little by little in a reverse mortgage. Old-fashioned workplace pension plans helped previous generations to collectively build capital to support themselves in old age, but it's a lot harder to do that individually with RRSPs and TFSAs. Did yours make the 18% the CPP earned last year, or the better than 14% that defined benefit plans averaged across the country?
I don't understand why one would not simply get a secured Line of credit with any chartered bank.
Interest could be as low as prime + 0 if you let it float, or take out a lump sum at even less.
The beauty (or danger) with a line of credit is that you only need pay the interest.
I'd rather deal with RBC than the shylocks that run these reverse mortgage gimmicks.
Interest could be as low as prime + 0 if you let it float, or take out a lump sum at even less.
The beauty (or danger) with a line of credit is that you only need pay the interest.
I'd rather deal with RBC than the shylocks that run these reverse mortgage gimmicks.
The reason people do it is they are desparate for money. I believe they don't make any payments under one of these arrangements until they are dead. That has ssome appeal to those that are asset Rich but cash poor
Here's an interesting take on this topic
[video]http://www.theglobeandmail.com/report-on-business/video/video-carrick-talks-money-the-case-for-reverse-mortgages/article22424043/[/video]
[video]http://www.theglobeandmail.com/report-on-business/video/video-carrick-talks-money-the-case-for-reverse-mortgages/article22424043/[/video]
That would be the trap of these things; the loan must be repaid at some point. You won't care once you're dead, but your heirs will. Even if you don't have heirs, the vultures will be picking apart your estate. I'd rather have that money disbursed how I want instead of giving it to them
I helped an older relative who I helped with this. It was a VERY good plan for her, and worked out perfectly
Everyone has different needs and reasons to consider it. What is the situation you/your friend is considering a revere mortgage for?
A Dog could get a loan these days. Take you're dog to the Bank and ask for delivery in cash. Then shoot your dog.
BS
BS
Depends on a lot of things and having that money can be a good or bad thing depending on what you use it for.
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