 Someone recently asked me about the differences between a reverse mortgage and an equity take out. You may wonder the same.
A reverse mortgage pays you every month using your property's equity, whereas an equity take out allows you to borrower as much money as you require (provided it's within lending guidelines) and make monthly payments on it. Both loans come with added interest, so deciding which one you should take ultimately depends on your financial situation and your age since reverse mortgages are only available to those over 55 years of age. Some people can't afford to make monthly payments on a mortgage loan, like, for example, retired people receiving a Government pension. And, we definitely don't want people to get into a situation that puts them at risk of mortgage default, so an equity take out may not be suitable for them. A reverse mortgage can help people that have affordability concerns since their equity would be paid to them in a smaller monthly payment. Although a reverse mortgage has its benefits, it also has downfalls, including the fact that borrowers over the age of 55 are reducing their assets, accumulating interest and possibly interfering with inheritance plans. If you can comfortably make monthly payments, then it would be a wiser option to consider an equity take out through an equity program that considers your property's value without a heavy reliance upon income requirements. This way you can receive the lowest interest rates which makes borrowing more affordable. If you have questions about either type of mortgage, please call or write. I have expertise in both equity mortgages and reverse mortgages and can advise you with confidence. Sarah A. Colucci Mortgage Agent Lic. M14000929 Mortgage Edge, Broker 10680 Direct: (647) 773-4849 www.coluccimortgages.com
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 Interest rates have remained incredibly low because of the pandemic. Recently, however, a vaccine developed by Pfizer showed some promising results for its COVID-19 vaccine efficacy.
Some people wonder if Canadian mortgage interest rates will increase because of this development. It’s likely Canada’s five-year mortgage rate will increase. Some brokers and economists predict that rates will jump approximately 10 to 20 basis points soon. For example, if current rates are 2%, borrowers could expect rates to jump to 2.20%. Once the Pfizer vaccine is proven to be safe and is approved by Health Canada, lenders will feel more comfortable increasing their interest rates which would set them on a path for further rate increases. What does this mean for you? If you’re currently shopping for a mortgage and wondering what term to take, consider the five-year fixed rate. Although variable rates have proven to be cheaper over the last 30 years, five-year fixed rates protect against economic volatility. If you’re considering refinancing your mortgage to complete debt consolidation or to access the equity in your home, it’s wise to take advantage of record-low interest rates today. We may not see them again for a very long time. Call or write today. Consultations are always free. Sarah A. Colucci Mortgage Agent Lic. M14000929 Mortgage Edge, Broker 10680 Direct: (647) 773-4849 Email: [email protected] Website: www.coluccimortgages.com The Purchase Plus Improvements Program allows you to borrow money at the cheapest possible costs. You can renovate a home in your budget in as little as 60 days and merge the costs associated with your reno into your new mortgage. For more information, please call or write. Sarah A. Colucci Mortgage Agent Lic. M14000929 Mortgage Edge, Broker 10680 Direct: (647) 773-4849 Email: [email protected] www.coluccimortgages.com |
By: Sarah ColucciSenior Mortgage Agent, Level 2, Lic. M14000929, Categories |
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Address411 Queen St.
Newmarket, ON L3Y 2G9 Sarah A. Colucci, Mortgage Agent Lic. M14000929 Sherwood Mortgage Group Licence # 12176 |
TelephoneDirect: 647-773-4849
Email: [email protected] |
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