Reverse Mortgage Myths vs Facts: What Canadian Seniors Should Know
Reverse mortgages come with a lot of misconceptions.
Let us separate the myths from the facts so you can make a decision based on accurate information.
Myth: The bank takes ownership of your home Fact: You remain the owner of your home with a reverse mortgage.
The lender simply has a claim against the property, just like a regular mortgage.
Myth: You could owe more than your home is worth Fact: In Canada, reputable reverse mortgages include a no negative equity guarantee, so you will not owe more than the fair market value of your home when it is sold, provided you meet your obligations.
Myth: You cannot leave your home to your children Fact: Your heirs inherit the home and any remaining equity after the loan is repaid.
They can also choose to repay the loan and keep the home.
Myth: Reverse mortgages are only for people in financial trouble Fact: Many homeowners use reverse mortgages as a smart part of their retirement plan, to improve cash flow, fund renovations, or help family, not out of desperation.
Have a question about something you have heard? Contact me today and I will give you a straight answer. This article is general information only and not personalized financial advice.