What is a reverse mortgage? Reverse mortgages are for homeowners over the age of 55. A New Brunswick reverse mortgage is secured by your home equity. Your home equity is the difference between the value of your home and the unpaid balance of any current mortgage. This allows homeowners to get cash without having to sell their homes.
The CHIP Reverse Mortgage, is the main source of most reverse mortgage products that are available in Canada. You can also speak to your bank or a mortgage broker for other options that can fit your needs.
You don’t make any payments with a reverse mortgage. Instead, the interest on your reverse mortgage grows, which makes your home equity shrink in time. If you sell your house or your home no longer is your principal residence, you must repay the loan and any interest that has accumulated. We wouldn’t recommend getting a reverse mortgage if you don’t plan on staying in your home, as you will have to pay it back.
Make sure you understand all the terms before choosing a reverse mortgage.
Benefits to a New Brunswick Reverse Mortgage:
- No regular payments on the loan.
- You can get cash from some of your home value.
- The borrow money is tax free.
- This income does not affect the Old-Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may be receiving.
- You get to keep ownership of your home.
- You decide how to spend the money.
Disadvantages to a New Brunswick Reverse Mortgage:
- Higher interest rates to most mortgages.
- The equity in your home decreases while your interest increases.
- When you pass away, your estate will have to repay the loan and interest in full within a given time.
- There will be less money to give to your children after you pass.
- The costs associated with a reverse mortgage are usually quite high.
If you would like more information regarding a New Brunswick reverse mortgage you can contact Team Jardine and we would love to discuss your options! Our Mortgage brokers are highly trained and are here to help! We look forward to hearing from you!
