If you’ve been wondering about the possibilities of a lifestyle mortgage – also known as a reverse mortgage – you likely have questions about what they are and how they could potentially benefit yourself or your family. To get the answers, including why it might be the solution you’ve been looking for if you’re 55+ and own your own home, we chatted with Rich Ulvild, a mortgage broker here in Surrey.
Q. Who is eligible for a “lifestyle” mortgage?
A. Canadian homeowners age 55+
Q. What exactly is a “lifestyle” mortgage (more commonly referred to as a “reverse mortgage”) and how can it benefit you?
A. A lifestyle mortgage or reverse mortgage allows you to take a portion of your home’s equity and turn it into tax-free, reliable funds with no monthly payments, while maintaining full homeownership, says Ulvild. How you use that money is entirely up to you and it’s quickly becoming one of the most popular ways for seniors to stay ahead financially.”
Q. Where do you need to live to potentially be eligible?
A. Generally you need to be living in a large town or city, like Surrey for example, Ulvild says. Your home needs to be your primary residence for a minimum six months of the year.
Q. When should you consider a “lifestyle” mortgage?
A. “Lifestyle mortgages are versatile and can be used for more than you think, Ulvild says. Thousands of Canadians are currently using them to help them bridge their retirement savings for everything from unexpected health care costs and renovations to travel or helping their children get into their own homes. “A lifestyle mortgage can be utilized in so many beneficial ways!”
Q. Why should you consider a lifestyle mortgage over other financial products and services?
A. Lifestyle mortgages are gaining popularity due to their low-risk nature, Ulvild says. The money you could receive is tax-free, you retain full ownership of your home and you decide how to spend the money you receive. There’s no regular mortgage payments required and no negative equity is guaranteed – you’ll never owe more than the fair market value of your home, Ulvild says. “So you could say that the benefits generally outweigh the risks and as many Canadians are finding out, lifestyle mortgages can make a massive impact on quality of life.”
Q. What are some additional details to keep in mind?
A. Generally you can access up to 55 per cent of your home’s equity with a lifestyle mortgage. “I can’t stress enough that you decide what you do with the funds you receive, which means you can finally take that vacation, or make those much-needed renovations that you may have been postponing, or use it to help the people who matter the most to you, right now,” Ulvild says.
“A lifestyle mortgage can really be the saving grace that so many seniors have been looking for,” Ulvild says. “There’s a lot of wrong information out there when it comes to lifestyle – or reverse mortgages – and even just the term “reverse mortgage” can be misleading. If you’re 55+ and have been looking for a solution to a cashflow problem, I strongly recommend you reach out to an experienced mortgage broker and get your information directly from the source.”
This is the first in a series of Q&A sessions with Rich Ulvild. In the next instalment, we’ll review some of the common misconceptions about lifestyle mortgages. For more information about this and all your other mortgage-related questions, call Rich Ulvild at 604-803-1456, email rich@mylendingexperts.ca or find additional information online here.