A cushion against the rising cost of living

A reverse mortgage can be a flexible tool for a senior to offset the rising cost of living, to borrow more than a bank may be willing to lend for a traditional mortgage, and to provide emergency funds for long term care, if you want to age in place.

Here is an Example of how Reverse Mortgages can improve your life: (real life example!)

Julie is a 75 year old living in North York, Toronto. She's lived in her home for over 40 years, and she and her late huband raised thier family there. Given the location, she figures her older home is worth about $2 million. There's also been speculation that there may someday be approval for condo development, which could cause the land value to skyrocket.

Julie receive the maximum CPP pension of about $1300.00 per month and gets nearly the maximum OAS pension - another $700.00 or so each month. That equates to about $2000.00 of monthly pension income from the federal government. She also has a small pension from the UK that fluctuates year to year based on teh exchange rate.

Beyond that, she's been drawing down a savings account from a modest inheritance from her parents and a small life insurance policy paid out when her husbands passed away a few years ago.

Things are getting expensive and Julie's options have come down to the following to help cushion the impact of inflation:
1. Use credit cards (very high interest charges).
2. Obtain a HELOC, but that is based on income, plus take a bit out of her monthly income for the interest payments.
3. Sell her home and move into an apartment or retirement home. Julie struggles with this one, she loves her home and doesn't want to leave.

Solution:
Julie decides that a reverse mortgage is a good fit.