What if the homeowner already has an existing mortgage?
Not a problem. Many Canadians use a reverse mortgage to pay off existing mortgages and even other debts as well, such as credit card debt, car loans, etc.
Any debts secured by the home (such as existing mortgages, lines of credit, home equity loans, liens, etc.) will be paid off from the reverse mortgage funds. The homeowner gets all the remaining mortgage cash.
Will I ever be forced out of my home because of a reverse mortgage?
As long as you maintain your property taxes and property insurance, you will NEVER be asked to leave your home because of a reverse mortgage. You will remain the owner of your home.
You will never owe more than your home is worth.
Reverse mortgages are designed to safely provide tax-free income to Canadian homeowners aged 55 and older. All you are required to do is keep your property taxes current and maintain home insurance and keep your property well-maintained.
If I die, will my surviving spouse be stuck with paying back the reverse mortgage?
No. If one homeowner passes away, then the surviving spouse can choose to remain in the home (and doesn't have to make any payments) or sell the home.
Reverse mortgages in Canada protect the homeowners' rights to live in their home as long as they choose.
What are the homeowner's obligations?
Four simple things.
One, you must live in the home (at least over six months per year, even six months plus one day is sufficient). Two, you must pay property taxes on time. Three, you must maintain the property's insurance. And four, you must maintain the property in good condition.