You have likely seen the ads on TV and online for reverse mortgages. So, you know that a reverse mortgage lets you borrow money against the value of your home without having to sell it.

However, if you are considering getting a reverse mortgage on your Toronto home, then it is essential to understand how it can give you financial security and to be clear on how reverse mortgage rates work. Explore more about current mortgage rates to make informed financial decisions.

1. The money you borrow is tax-free

One of the best things about a reverse mortgage is that the money is tax-free. Therefore, you won’t be hit with a big tax bill! In addition, your reverse mortgage loan is not considered income by the government, so it does not impact your eligibility for Old-Age Security or the Guaranteed Income Supplement.

2. You can spend the money any way you want

Most loans are tied to a specific purpose, such as buying a car or opening a new business. With a reverse mortgage, though, there are no restrictions on how you can spend the money.

Whether you want to upgrade your current home so you can age in place, go on a big vacation, or simply need cash for everyday bills, you’ve got the financial security you need with a reverse mortgage.

3. You don’t have to worry about having the resources to pay the loan back

Normally, when you take out a loan, you must have a steady income stream coming in to pay it back. With a reverse mortgage, however, this is not an issue. You do not have to dig into your retirement savings to try and pay back the loan; instead, you can simply sell your house when you are ready to move.

Want to learn more about how reverse mortgages work?

At Northwood Mortgage, we offer several different mortgage options, including reverse mortgages. We know it is vital for our customers to be clear on what kind of product they are purchasing, so we will explain all of the following to you:

  • The maximum amount of money you can borrow with a reverse mortgage. This is tied to the appraised value of your house.
  • The bills you must keep up with if you want a reverse mortgage, such as having homeowner’s insurance and paying your property taxes.
  • The different ways you can receive your loan, such as in a lump sum or monthly payout.

Just as with standard mortgages, there are different types of reverse mortgage rates in Toronto. If you decide to get your loan as a lump sum, it will come with a fixed interest rate. If you choose to take your loan as a line of credit or monthly payouts, it will have an adjustable interest rate.

We can answer any questions you may have and help you determine if a reverse mortgage is right for you. To get in touch with one of our qualified mortgage brokers, give Northwood Mortgage a call at 888-257-8130 or contact us online.