Retirement is meant to be a time of enjoying the fruits of your labour. For many it is a time when they can finally travel the world, spend time on their favourite hobbies, or enjoy more family time. Unfortunately, however, for many it is also a time of financial stress and worry. Oftentimes, retired Canadians find themselves without sufficient income – or the savings that they thought would see them through retirement may quickly evaporate with a single medical emergency.
If you find yourself in a situation like this, your first thought may not be to visit a mortgage broker – but perhaps it should be. Mortgage brokers can be an extremely valuable resource when it comes to saving retirees from financial stress.
How do they do it? By helping you access the equity in your home.
Think about it. You have spent years working to pay down your mortgage, all the while your home was likely increasing in value. So if you have a home with equity in it, you have essentially created your own bank account which can help relieve you of your financial anxiety.
How can you access the equity in your home?
Mortgage brokers offer many tools by which a retired person can access the equity in their home. Refinancing, second mortgages, and home equity lines of credit are all popular choices among working Canadians but since these all have strict payment schedules, they might not be the right choice if you are retired and on a fixed income.
A better option for retired Canadians may be a product called a reverse mortgage.
A reverse mortgage is a loan against the equity in your home which may be taken either as a lump sum, a monthly payment or a combination of the two. Unlike the other mortgage products mentioned, a reverse mortgage does not have a regular payment schedule. You may pay it off as early as you like or you may decide not to pay it at all until you either pass away (in which case it must be paid by your estate) or when you move out of your home.
To qualify for a reverse mortgage, you must be at least 55 years old and have sufficient equity in your home.
If you are interested in learning more about reverse mortgages or about any of the other ways in which mortgage brokers can save retirees from financial stress, contact the team at Akal Mortgages today.
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