A reverse mortgage, is it worth it? It is an interesting question. Reverse mortgages are definitely on the rise. There are now many commercials airing on TV stating the merits of getting one. But what is a reverse mortgage? Who is eligible? What are the pros and cons? Is it worth it?
What is a Reverse Mortgage?
Here’s a definition from the government of Canada website, “A reverse mortgage is a loan that allows you to get money from your home equity without having to sell your home. You may be able to borrow up to a certain percentage of the current value of your home. The maximum amount you will be able to borrow will depend on your age, your home’s appraised value and your lender.
You don’t need to make any payments on a reverse mortgage until the loan is due. This is usually when you move out of your home, sell it or the last borrower dies. You will owe more interest on a reverse mortgage the longer you go without making payments. This may result in you having less equity in your home.”
Who is Eligible?
The government of Canada website says that you have to be at least 55 years old, a homeowner, it has to be your primary residence. Also, if you have a mortgage or lien on your home, you have to pay it off when you get a reverse mortgage.
A person may turn some of the value of your home into cash, without having to sell it
You don’t have to pay tax on the money you borrow
This money does not affect the Old-Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may be getting
You still own your home
You may have options as to when and how you receive the money
Interest rates are higher than most other types of mortgages
The equity you hold in your home may go down as the interest on your loan adds up throughout the years
Your estate will have to repay the loan and interest in full within a set period of time when you die
The time needed to settle an estate may be longer than the time allowed to repay a reverse mortgage
There may be less money in your estate to leave to your children or other beneficiaries
Costs associated with a reverse mortgage may be higher than a regular mortgage or other lending products
Some Caution about Reverse Mortgages
As mentioned above, a reverse mortgage is a loan and with a loan there are conditions that have to be meant and this is where caution is needed. For example you required to keep up the value of the home by maintaining it. However, as you get older this could be harder to do and if your place fall into disrepair you could default on your loan and potentially lose your home. A similar scenario can happen if you do not pay your property taxes and home insurance.
Is it Worth it?
It depends. If you plan to stay in your home right up until you die and you have no beneficiaries to your estate then the reverse mortgage might be to your liking. But if you have beneficiaries you want to give money to after you die, or you plan to downsize or go into assisted living, then it might not be for you. So do your due diligence and do your research. Because a reverse mortgage is not free money but a loan that has conditions like other loans. So you need to be mindful.
Checkout 51 (If you haven’t already signed up for this money saving app, click here click here to join!) is an incredible Canadian app that helps shoppers find the most valuable coupons. But, instead of the hassle of buying a newspaper and clipping coupons, you have all your best coupons with you stored right in the app! I love the convenience of Checkout51, and check it for deals every week.
This is a reliable company that issues you money back into your account when you verify that you have purchased a certain product. Verifying your purchase is as simple as using your phone to take a photo of your receipt.
The new deals are updated every week on Thursday, so yesterday was the day! Here are the best deals on Checkout51 this week. (My top tip for money savers in Canada using this app is…use it in conjunction with the Flipp flyer app to find out which items are also on sale! Then, use your money saving virtual coupon on top of a sale, and save mucho dollars!)
Food and Groceries
Armstrong cheese products – $0.75 off either cheese slices or sticks. These are SO handy for lunchboxes – the slices to tuck into a sandwich, or the sticks as a snack!
Little Potato Company – has a wide range of varieties of flavoured mini potatoes that you just microwave. Voila, instant side dish! $0.75 cash back this week.
Enjoy Life Foods – this is a company well known to anyone who has to eat gluten free. (As I have for nearly 12 years now.) They make a delicious range of gluten free treats and cookies. $1.00 cash back on selected varieties of cookies, bars, and energy bites.
SMARTFOOD popcorn – has some glorious new Indulgence popcorns that sound to die for! Either Dark Chocolate and Raspberry or Milk Chocolate & Caramel. Both $1.50 cash back. (GREAT DEAL!!)
Glutino – their gluten free cookies and crackers are all on offer this week. $1.00 cash back on selected varieties. (I particularly like their gluten free version of Oreos. So good crushed over ice cream!!)
FRANK’s Red Hot Sauce – is a favourite around here! $1.00 off selected types.
STAGG chili is an easy lunchtime or supper choice. $0.75 cash back. Use this chili to top a sweet potato, and then add a dollop of sour cream and a sprinkling of green onions or chives. Delicious dinner done in only minutes! (Hint: they have 6 varieties of their chili on Cash Back offer this week – so stock up on a few different kinds!)
Home and Cleaning
Finish dishwasher detergent tabs – at Walmart only – $2.00 Cash Back
Finish Jet-dry rinse aid – at Walmart only – $1.00 Cash back
Spongetowels Ultra paper towels – $1.00 Cash Back
Pledge polish and other products – $1.00 Cash back
Scrubbing Bubbles products – great for cleaning the toilet with a LOT less work – $1.00 Cash back
Head and Shoulders products – at Rexall only – $2.00 Cash back
Buy 2 Herbal Essences bio:renew products – at Rexall only – $5.00 Cash back (HIGH VALUE alert!)
Pantene products – at Rexall only – $2.00 cash back
Selected CREST products – ranging from toothpaste to Whitestrips – from $2.00 to $5.00 Cash back
Selected ORAL-B floss products – $1.00 Cash back
Listerine Go! Tabs – $1.00 Cash back (I watched the commercial about these with interest, but haven’t tried these yet. If anyone has, please leave a comment!)
Medicine and Health
Renew Life probiotic products – $4.00 Cash back (please check app to see exactly which types are included in the offer)
COMBO deal – Vicks Dayquil and Nyquil products – $4.00 cash back when you buy both. (These deals are awesome if you have coupons for the individual products, too!)
Fisherman’s Friend lozenges – buy 2, get $0.50 cash back
Imodium – $2.00 Cash Back
RestoraLAX – $3.00 Cash back
Lots of good deals on Melitta coffee this week! Give me a good deal on coffee, and I’ll arrive holding my favourite mug. 😊
Melitta 100% Compostable (yay!) coffee pods – $2.50 Cash back
Melitta pour-over brewer (at select retailers) $2.00 Cash back
Melitta roasted and ground coffee $2.00 Cash back
Melitta whole bean coffee $2.00 Cash back
Caotina Swiss chocolate drink powder – $1.00 cash back (A friend brought me a pack of these back when I was fighting off the flu. It makes a lovely, comforting hot cocoa drink.)
Frontera bowls – $0.50 cash back
Healthy Choice power bowls – $0.50 cash back (and I’m quite sure there are still coupons available for these. Double savings!)
Breyers Delights ice cream – $1.50 cash back
Babies and Kids
Lots of diapers on offer this week – match theses up with any coupons you have for mega savings! And I know you Moms out there are always on the lookout for diaper deals.
Renew Life Flora kids and baby probiotics – $3.00 Cash back
Selected HUGGIES wipes $2.00 cash back (on larger size packages)
Kandoo flushable baby wipes – at Walmart only – $1.00 cash back
Select HUGGIES diapers $4.00 cash back (HIGH VALUE)
HUGGIES little swimmers waterproof diapers – $2.00 cash back
Pull-ups training pants $3.50 cash back
Beyond Natural dry cat food $4.00 cash back
Beyond Natural wet cat food – buy 2 and get $1.50 cash back
Beyond Natural dry dog food – $4.00 cash back
Beyond Natural wet dog food – $3.00 cash back on 2
Meow Mix dry cat food – $2.50 cash back
Meow Mix wet cat food singles $0.25 cash back (limit of 5 claims)
Nature’s Recipe Grain free pet foods $4.00 cash back
Plus, there are even more cash back offers on the app! Please visit again for next week’s choices, and please leave a comment about your best deal using Checkout51 with sales and/or coupons. I love hearing about your savings!
Once your account hits $20 in accumulated savings, Checkout51 sends you a cheque in the mail. I have received these cheques, and therefore feel excited to tell you about Checkout 51 if you haven’t already heard of them. Click here to join as a new member. (click here) Hope you save some money on your groceries this week!