Reverse Mortgage

A reverse mortgage is a tax-free and payment-free loan for homeowners aged 55 and older. Through a reverse mortgage, you can borrow up to a maximum of 59% of the equity you have built in your home, either through a single lump sum or scheduled advances.

Interest rates on a reverse mortgage have terms up to five years and can be reset repeatedly at the end of each term. You repay the reverse mortgage when the house is sold, you move out or upon the death of the last borrower.

To qualify for a reverse mortgage, homeowners must be 55 years old and over and must own and occupy their home as their primary residence.

Unlike a HELOC, a reverse mortgage does not require monthly payments. Additionally, reverse mortgages, such as EquityAccess, typically do not have a minimum FICO score requirement and have lower income criteria.

No, it’s not necessary to own your home outright. You can have an existing mortgage on the property when you apply for a reverse mortgage. In such cases, the existing mortgage will need to be paid off using the proceeds of the reverse mortgage.

With a reverse mortgage, homeowners can access up to 59% of their home equity.

If you have a reverse mortgage, you must still pay property taxes, insurance, and maintain your property as a homeowner.

You will continue to own your home even after obtaining a reverse mortgage. A reverse mortgage offers a flexible way to meet your financial goals while allowing you to retain ownership and remain in the home you’ve worked hard for.

A reverse mortgage can help you reach your goals and secure your future. With a reverse mortgage, you can:

• Pay off any existing mortgage or debt and reduce monthly expenses
• Manage upcoming expenses, including home renovation or major purchases
• Provide beneficiaries with a living inheritance
• Help loved ones buy their first home or start a business, or
• Manage day-to-day activities and expenses while on a limited income

A reverse mortgage from Home Trust comes with our payment guarantee, which ensures that as long as you meet your obligations, such as paying property taxes and keeping your home in good condition, you will never owe more than the fair market value of your home.

No, you do not have to pay taxes on a reverse mortgage, as it is considered a loan and therefore is not taxable.

A reverse mortgage is due when you sell your home, when the last of the borrowers moves out permanently (for example, to receive long-term care) or upon the death of the last borrower.

No, the loan is repaid using the proceeds from the sale of your home, and any remaining equity will be passed on to your estate.

No, regular payments are not required on a reverse mortgage. You can choose to make monthly interest payments based on your prepayment privileges, which would be set up as a monthly pre-authorized debit. The advantage of making monthly interest payments is that it keeps the principal balance of your mortgage from growing.

There are specific fees for a reverse mortgage. These will include:

• a set-up fee, which is deducted from the initial advance,
• appraisal fee (paid to an external property appraiser), and
• legal fees for closing costs and independent legal advice

Other fees may be applicable after underwriting review.

Applying for a reverse mortgage from Home Trust is simple:

1. Meet with your mortgage broker to review your financial goals and your reverse mortgage options.
2. Your mortgage broker can help you complete an application form and submit it to Home Trust for underwriting review. We will provide your broker with a commitment and request any additional documentation as needed.
3. You may be asked to have a third-party appraisal of your home.
4. You will also need to meet with your lawyer to obtain independent legal advice and ensure you understand exactly how the reverse mortgage product works.
5. Once this review is complete, you will sign your reverse mortgage documents with your lawyer.
6. When the documents are signed and complete, we will advance the initial funds to your closing service provider.

Yes, as the legal titleholder of your home, you and, if applicable, your non-title-holding spouse must obtain independent legal advice from your lawyer during the reverse mortgage application process. This is done to ensure you understand the terms and conditions of the reverse mortgage, are of sound mind and judgement, and that you are not being pressured to sign mortgage documents

A lender cannot demand full repayment of the loan even if the house’s value goes down. As the homeowner, this means that you will never be forced to sell or foreclose your home as long as your property taxes and insurance are paid on time, the house is in good shape and you continue to live on the property.

Lenders use a variety of factors to determine the amount you qualify for, including your age, your location, how much equity you have in your home and the value of your home as determined by a third-party appraisal.

You can choose from two types of advances: ad hoc advances and scheduled advances.

• An ad hoc advance is a one-time advance that gives you access to your funds when you want them. The minimum advance amount is $5,000 and is subject to a fee. If there is a difference between your interest rate and our current interest rate, we will reset your interest rate as a weighted average for the remainder of your current interest rate period.
• Scheduled advances are advances that you will receive on a regular basis, following a pre-arranged schedule. You can set up to receive advances from your reverse mortgage on a monthly, quarterly, bi-annual or annual basis. The frequency and amount of your advances can be structured up to 20 years.

The scheduled advance option is only available on reverse mortgages with an adjustable interest rate. Interest rate on each advance will be determined by the rate in effect at the time of the advance.

There are no additional fees on scheduled advances. The minimum amount advanced depends on frequency:

• For monthly advances, the minimum is $500
• For quarterly advances, the minimum is $1,500
• For semi-annual advances, the minimum is $3,000
• For annual advances, the minimum is $6,000 annually

Once the total of your advances reaches the maximum amount you’ve been approved to borrow, the scheduled advances will end.