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Mortgage Financing For Seniors



If you are of a certain senior age and are unsure about the options you have as far as Mortgage Financing for maintenance, upkeep, or renovation is concerned, we have all your doubts cleared. First and foremost if you have no major debts chances are you can easily access your home equity without selling or moving. But what kind of finance option should you opt for? To answer this question you need to understand those available to you.


Though Canada has many mortgage financing options the ones for seniors would be:


Home Equity Line of Credit: You could have the freedom to the borrower a larger or smaller sum of money as per your requirement, but not more than 65 percent of the value of your home. For availing of this option, the interest rate is variable. The line of credit, however, can be clubbed with a regular mortgage as per the terms of your contract.


Refinancing: It is the simpler option to go for mortgage financing if you have the capability to make monthly payments. It also provides the best interest rate you could get. You could borrow up to 80 percent of the value of your home. For repayment, monthly installments will have to be made but can be spread over a comfortable time period of 25-30 years or as specified in your contract.


Reverse Mortgage:  Reverse Mortgages are an option that comes with quite a complex contract. You could borrow up to 55 percent of the value of your home either altogether or as a sum divided into fixed monthly payments. Almost always, the loan amount, as well as the accumulated interest, is paid back upon the sale of your home or when you pass away. Reverse Mortgages are expensive, and we highly recommend that you seek legal advice before opting for this one.


Now that you know the possible options you have for your mortgage financing needs all you have to do is to make a decision. Mostly, the option you decide to go for depends on your current needs, the urgency of the situation, as well as the terms of the contract that your lender is offering. We would suggest you arrive at a decision by asking yourself the following questions:

  • What will happen (per the mortgage financing terms) in the event of you wanting to sell your home?

  • Will this decision affect your spouse/partner/children in a big way?

  • If the amount you owe is higher than your house value repayment is due, what happens in such a scenario as per the contract?

  • In the event of you deciding to pay off the loan earlier than stated in the contract, is there a penalty levied? If so, is it a considerable amount?

  • If you change your mind, does the agreement have a 'cooling off' period in case you want to cancel it?

  • Would you want the loan as a lump sum payment made to you or would you want to go in for smaller fixed payments each month?

If you still have any doubts related to mortgage financing at your age do book an appointment with us. We would be happy to help.

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