Forget HELOCs. Follow the trend to Reverse Mortgages - Kora Management
  • Mitch Speigel – Mortgage Agent
    Your Mortgage Group Professional
    Kora Management
    License #M08003984, FSCO #10315

  • Your home as an ATM

    Canadian homeowners in their golden years have a new favorite way to use their home like an ATM. Office of the Superintendent of Financial Institutions (OSFI) filings show the balance of reverse mortgage debt is now at a new all-time high, and still posting growth above 20% growth.

    Tap your home equity, without selling.

    Also called an “equity release,” the borrower pledges his home for a lump sum loan or regular payments.  Similar to a home equity line of credit (HELOC), but the borrower doesn’t have to make payments, nor does the borrower have to qualify. Payments is only required if he moves, sells, dies, or defaults on the property. A default would be limited to non-payment of taxes or insurance since no mortgage or interest payments are required.  In exchange for the “generous” terms, mortgagors are charged a higher interest rate than a typical HELOC.

    It’s a great deal.

    Sounds like a great deal and it is. Those that elect not to make payments, however, are looking at debt accumulation. Since the rates are higher than a HELOC and you’re not making payments, the debt can snowball pretty fast. If borrowers aren’t careful and are unfamiliar with how interest accumulates, they may find themselves with less equity than they planned. On the other hand, because of the very conservative of the Reverse Mortgage loan amounts, it is likely that the appreciation of the value of a home will make up for most, if not all of the interest accumulation.

    Canadian Reverse Mortgage Debt Rises Over 28%

    Canadians racked up another record month for reverse mortgage debt. Filings show the outstanding balance reached $3.66 billion in April, up 1.24% from the month before. The rise in balance brings the total 28.15% higher than the same month last year. This a new all-time record high, and very large growth at a time when other credit segments are much lower.

    As Canada’s population ages, more cash-poor, house-rich retirees are also going to be looking towards this segment.

    It’s that pickling time of the year. Today, It’s carrots. Cut carrots to size and blanch them for 2 minutes. Mix and cool brine: 2 cups water, 1 tbs salt, 1 cup vinegar. Add garlic, chilis, or ginger, or herbs. Seal and leave out for 2 weeks.