How HomeEquity Bank can help you address these myths
This article was provided by HomeEquity Bank
How much do your clients really know about reverse mortgages? Maybe they know that reverse mortgages can help Canadians 55+ access the equity in their home, tax-free. Maybe they know that tens of thousands of Canadians are using a reverse mortgage as part of their financial plan. But did you know that these five common misconceptions around reverse mortgages might be misleading your clients? As Canada’s leading provider of reverse mortgages, HomeEquity Bank can help you set the record straight and grow your client book.
1. Your clients will no longer own their home
Nothing could be further from the truth. Your clients will always maintain title, ownership and control of their home - HomeEquity Bank simply has a first mortgage on the title.
2. They will owe more than the value of their home
With the CHIP Reverse Mortgage No Negative Equity Guarantee(1), the amount your clients will have to pay will not exceed the fair market value of their home as long as they meet their obligations. In fact, over 99% of Canadians who use a HomeEquity Bank product retain the equity in their home when they decide to sell, with over 50% of the home’s value remaining after the loan is paid back (on average).
3. Only people younger than 62 can apply for a reverse mortgage
In Canada, the CHIP Reverse Mortgage is available to Canadian homeowners aged 55 and older. In fact, as your clients age, they are more likely to qualify for a higher amount on their loan. A reverse mortgage is a lifetime product. As long as the property taxes and insurance are in good standing, the property remains in good condition, and the homeowner is living in the home full-time, the loan won’t be called even if the house decreases in value.
4. Failure to make payments can result in eviction
This is one of the most common misconceptions when it comes to reverse mortgages. The CHIP Reverse Mortgage does not require any monthly payments, meaning your clients never have to worry about missing a payment.
5. Arranging a reverse mortgage is very expensive
This is also untrue. Much like a conventional mortgage, reverse mortgages require your clients to pay for a property appraisal and independent legal advice. The only additional cost is a one-off closing and administration fee. When compared to the cost of “rightsizing” with a new home, a reverse mortgage is a much more affordable option for your clients.
To find out how you can offer HomeEquity Bank’s suite of reverse mortgage products to your clients, find your BDM today.
[1] The guarantee excludes administrative expenses and interest that has accumulated after the due date.
