Still, many brokers are wary.
“I can understand why many homeowners would be attracted to this type of finance as it’s a fixed rate compared to a HELOC, and it’s a way of getting cash quickly if you are going through a financial patch, but it’s not ideal, especially if you want to sell in the future,” Marc Abramovitz from Northwood Mortgage and founder of ilovemymortgage.ca said in early April. “There are a lot of other options available and homeowners really need to do a lot of due diligence and get independent advice before signing up for (reverse mortgages).”
And while reverse mortgages have been available since the introduction of the Canadian Home Income Plan in the mid-1980s, very few financial lenders have openly offered the product. However, with an aging population and dependent children needing help with down payments, there has been a report of rising interest in this financial method.
“I am seeing a lot more use and interest in reverse mortgages, especially for those who are in difficult situations,” Abramovitz said. “For example, one my clients had no mortgage on her home, and needed cash to reinvest back in her house. Her only other was to sell the property so a reverse mortgage was the best solution.”