RIHANA PEIMAN
Mortgage Solutions in British Columbia
Insurance & Investment Solutions in British Columbia & Ontario
REVERSE MORTGAGE: UNLOCK HOME EQUITY
FOR CANADIANS 55+
A reverse mortgage allows eligible homeowners, usually aged 55 or older, to access a portion of their home equity without selling their home. The funds received are generally tax-free, and regular mortgage payments are typically not required while the homeowner continues to meet the terms of the mortgage.
HOW DOES A REVERSE MORTGAGE WORK?
A reverse mortgage is secured against the value of your home. Instead of making regular mortgage payments, interest is added to the outstanding balance over time.
You continue to own and live in your home while accessing a portion of the equity you have built. The mortgage is generally repaid when the home is sold, the homeowner moves out, the last borrower passes away, or another repayment condition under the mortgage agreement occurs.
WHO MAY QUALIFY?
Eligibility generally depends on factors such as the homeowner’s age, the property, its appraised value and location, and the lender’s requirements.
AGE & HOMEOWNERSHIP
Applicants are generally required to be 55 years of age or older and own a qualifying primary residence with sufficient home equity.
PROPERTY RESPONSIBILITIES
Homeowners remain responsible for maintaining the property and keeping obligations such as property taxes and home insurance up to date.
HOW MUCH CAN YOU BORROW?
Eligible homeowners may generally access up to 55% of their home’s appraised value through a reverse mortgage.
The amount available depends on factors such as the age of the homeowner or homeowners, the property’s value and condition, and the lender’s guidelines.
HOW CAN YOU RECEIVE THE FUNDS?
Depending on the lender and mortgage selected, funds may be available as a lump sum, a partial initial advance with additional funds accessed later, scheduled payments, or a combination of available options.
The appropriate structure depends on your financial needs and the lender’s terms.
NO MONTHLY PAYMENTS
With a reverse mortgage, traditional monthly mortgage payments are generally not required. Interest is added to the outstanding balance over time.
Depending on the lender and mortgage terms, homeowners may choose to make voluntary payments toward interest.
WHEN IS A REVERSE MORTGAGE REPAID?
A reverse mortgage generally becomes due when the home is sold, the homeowner moves out, or the last borrower passes away.
WHAT SHOULD YOU CONSIDER BEFORE PROCEEDING?
Because interest is added to the mortgage balance over time, a reverse mortgage can reduce the amount of home equity available in the future and may affect the value of your estate.
It is important to compare the costs, available alternatives, repayment terms, and potential long-term impact before deciding whether a reverse mortgage is appropriate for you. Independent legal advice may also be required or recommended.
COMMON USES OF
REVERSE MORTGAGE
FUNDS
✓ Pay Off Existing Debts
✓ Cover Unexpected Expenses
✓ Renovate or Upgrade Your Home
✓ Supplement Retirement Income
✓ Invest Toward Financial Goals
✓ Fund Travel or a Special Vacation
✓ Help Children or Grandchildren
including support toward a home down payment
IS A REVERSE MORTGAGE RIGHT FOR YOU?
Every homeowner’s circumstances are different. Your age, home value, existing mortgage or debts, cash-flow needs, retirement plans, and long-term goals can all affect whether a reverse mortgage is suitable.
Rihana Peiman can help homeowners in British Columbia review reverse mortgage options, understand how they work, and compare available solutions before making a decision.