Homes and Condo Mississauga

Canadians With Reverse Mortgages Can Lose Their Homes If They Miss A Tax Payment


Canadians homeowners have seen the value of their real estate value exploding higher, but taking advantage of equity is difficult. Increasingly, older people have turned to reverse mortgages. The rapidly growing segment of loans advertises borrowers do not have to repay the loan until they move or die – but there are exceptions. A recent lawsuit in Ontario, CHIP Mortgage Corporation 5 Inc. v. Deep shows that if you are late with property tax your home can be declared in default. Even if it is very short & # 39; is, the lender can move to take possession of your property.

What is a reverse mortgage?

Reverse mortgages are a booming sector of loans for residential mortgages, reserved for seniors. A senior homeowner can receive a loan based on the equity they have built up in their ownership. The interest is quietly rising in the background, at about the same pace as a HELOC. The big difference is that, as CHIP, so far the only provider of reverse mortgages in Canada, "no payments have to be made until the borrower moves or dies." A small exception, if you miss a tax on property tax, you "You will also have to move and pay the legal costs of your lender.

Source: OSFI Filings, Better Dwelling.

Look for a "Short" standard

This was recently observed in a case between CHIP Mortgages and an elderly doctor in Toronto, and is owned by Lytton Park, and documents from the court of 8 March 2018 show that the mortgage borrower "very briefly" saw that his mortgage was in default due to unpaid property tax The homeowner acknowledged the situation, but the declaration of claim did not ask for the amount of the mortgage, instead they claimed that this standard gave them the right on the whole house

House and legal costs owed to lender

CHIP received not only the house, but also legal fees for the fact that they had to appear before the court. The judge awarded the lender the house, located in a street with an average selling price of more than $ 2 million. If that was not enough, "partial indemnities" were also awarded for an amount of $ 9,000. "Partial indemnities" is a nice term for part of the legal costs, but not all of them. This borrower not only lost his home for "very short", they also owed money.

Reverse mortgages are not new in Canada, they have been around since 1983. However, they have been a relatively small part of loans until recently. An increasing number of boom-rich boomers have turned to the lending segment as a supplement to the pension. Hopefully they understand the full terms of these loans.

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