Page 12 - Shalom Toronto Lifestyle Passover 2020

The Home Equity Mortgage
The Home Equity Mortgage
Michael James Georgopoulos
Capital Home Lending michael@capitalhomelending.ca mikegmortgages.ca
Tel: 416-899-1349
As Canadians, it has been instilled in us from a young age to work hard, the rewards will follow! For those who have been successful in their chosen fields, some having worked over 30 years at the same job, that reward ends up being retirement. Both government and employer pensions then become the main
source of income that one would use to support themselves and family, but what happens when those pensions are not enough?
As our population ages and pension funds dwindle, some are finding it difficult to make ends meet. Working past 65 years of age is becoming more and more common as a means by which one can maintain an accustom standard of living. This may be a welcome option for some who love what they do, but when health and energy levels effect ones ability to work, is there an option to retire without worry?
e Home Equity Mortgage has become something more Canadians are looking into and considering as a viable option to enter into retirement and still maintain a similar lifestyle as when they were working. is specialized mortgage product offered by a handful of broker banks allows a homeowner to pull tax free cash money out of their family home to use for whatever purpose they may require.
Without needing a working salary to qualify, these mortgage products can allow for upto a 55% equity take out from the home, based on its location and the age of the applicants. As an option, lenders will allow all mortgage payments to be capitalized (which basically means pre-paid) into the new mortgage amount so there would be no monthly obligations to the borrower. ese mortgages do have terms and rates just like regular mortgages, but because of the large amount of equity remaining in the home, the level of risk in lending is very low so that alleviates having to afford a monthly payment which is how traditional mortgages are qualified. Not having to downsize or sell is very important to many retirees, so by gaining access to a homes value to be used as a retirement fund becomes a huge bonus, and the interest cost can be justified.
Abetter case scenario would always be refinancing the mortgage before retirement, or setting up a secured line of credit in order to receive optimal rates and max qualifying based on working salaries, but every situation is different.
Its always good to have a financial plan in place and work out where you will be spending your money down the road, so let that be your first step when planning your retirement.
Amortgage professional will always remain your best resource when it comes to leveraging your homes equity, and will help you make the right decision if/when the need arises, so make sure you know your options well before making any life changes.
Always avaialble to answer your mortgage questions, I remain readily avaialble to help you plan your future. Please feel free to reach out anytime. Michael James Georgopoulos.
Page 12 SHALOM TORONTO Passover 2020