Reverse Mortgage FAQ

Will a reverse mortgage affect my credit score?

While a reverse mortgage doesn't directly impact your credit score, using the funds to pay off existing debts could actually boost your credit profile and increase your score! It's a win-win.  

Are reverse mortgage payments taxable?

Nope! The money you receive from a reverse mortgage isn't considered taxable income.  And if you use those funds to generate income (like investing), you might even get to write off the interest on your tax return.  

Can a reverse mortgage be paid off?

One of the best things about reverse mortgages is their flexibility. You're not required to make any regular principal or interest payments. In fact, you generally don't have to make any payments until you sell your home, move out, or the last borrower passes away. That said, interest does add up over time. Making even small payments can help keep those interest costs in check. And remember, you can always pay off the principal and interest in full at any time – though there might be a fee for doing so. Important Note: You might be required to repay the loan in full if your lender believes you've violated the terms of your agreement. This could happen if you:

• Misrepresented information on your application
• Used the funds for illegal activities
• Let your home fall into disrepair
• Didn't follow the rules outlined in your contract

Where can I get a reverse mortgage? Many banks and other financial institutions in Canada offer reverse mortgages. It's important to remember that the level of consumer protection can vary depending on whether the lender is federally or provincially regulated.  Federally regulated institutions (like most banks) generally offer stronger protections.  

What can I use the money for?

The best part is you can use the funds for just about anything: home repairs or renovations, everyday bills, healthcare expenses, paying off debts – it's up to you! Just check with your lender to see if there are any restrictions or fees. Ask me any questions you may have - I am here to help.