I am 68 years young .I started our company almost 30 years ago out of my gargage.Last year I sold my interest in the company to four of our agents, including my daughter and formed the Matthey Mortgage Team. Freed from the responsibilities of management I am now able to concentrate on what I love to do and that is helping homeowners and home buyers strategically deal with their mortgage.
My son, Chris, my daughter, Karen and Karen Schmidt , comprise the Matthey Mortgage Team. Chris has been a mortgage agent for 8+plus. Karen's background is in International Finance and has been an agent for 5 years. Karin Schmidt has a 20+ year banking background and is our client services manager
Our speciality is First Time Buyers, but we cover a wide range of financing options for all types of situations. I am also a "Reverse Mortgage Specialist". My experience with all types of financing options and my age allows me to talk to seniors on a "Senior to Senior" basis to guide them on the best financing options for their stage in life.
If you are military, you may have seen news stories on huge mortgage penalties paid by members to their Bank, when posted. You may qualify for our "Freedom Mortgage" for military that offers no penalty when you produce a posting notice inside or outside of Canada.
If you are a First Time Buyer , we have the most comprehensive guide available for you that you can order on line. Just send an email to email@example.com under the heading "First Time Buyers Guide Please"
I am proud to have been a nationally and locally award-winning Mortgage Broker for over 29 years in the Kingston area.I have been one of the broker/owners of our company over the same time period. I have been ranked in the Top 3 as a Mortgage Broker in the Kingston This Week's Reader's Choice Awards for the past several years, and in the fall of 2013, I was proud to be inducted into the Canadian Mortgage Hall of Fame with Mortgage Professionals Canada.
There are many ways to contact us if you have a question. You can text us direct at 613-561-2719. You can email us at firstname.lastname@example.org You can also access us Face2Face(F2F) through Apple Facetime by dialing 613-561-2719. The last option works well with our clients for any questions, they have on their mortgage, before, during or after closing.
It is our belief that our job does not end with your mortgage approval.We support you through changes in your life and lifestyle and we are there to guide you into the nest mortgage product that benefit you, not the lender.
We would love to hear from you.
The majority of our business comes from referrals, which is a great reinforcement that people appreciate the job that we do. Our job is not just to get you a great rate (although we do that too!) - it is to explain the home buying and mortgage process to you, clearly explain the terms and conditions of your mortgage to you (so unlike with the bank you're not suddenly hit with a shocking penalty you had no idea could happen) and keep you informed about where rates and the economy are going.
You can find Open Houses and New Listings in the Kingston area here:https://www.facebook.com/buysellshowkingstonrealestate/
You can find Waterfront Open Houses and Listings here:https://www.facebook.com/YGKWaterfrontproperty/
Part Four of The Downsizing Dilemma for “Boomers” from a “Boomers Perspective”
What is a Reverse Mortgage?
Reverse Mortgages as an Alternative
Lets get something on the table first. Whenever you see Reverse Mortgages discussed in a social media format, you will see a lot of negative comments.
It amazes me when I see the negative comments from people on a Reverse Mortgage who may have no working knowledge of the mortgage market as it exists today. I would also assume that some of the comments are from US-based commenters where Reverse Mortgages are totally different than they are in Canada. Finally, I would assume none of the negative commenters have done actual research into the product and are commenting on perception, not fact through experience.
There are many misconceptions about a Reverse Mortgage. This mortgage does not prey on seniors. It is a product known by many as CHIP due to the heavy advertising by Home Equity Bank. Other institutions have got into the game, but their products are more restrictive. As a broker, I am certified as a Reverse Mortgage Specialist. So, when I discuss this product, I consider it amongst other financing offers for seniors. It is also a product that has the most disclosure of any mortgage product. Borrowers are obligated to have independent legal advice before they can even enter into the agreement. There is nothing hidden.
Some say You will be forced to Sell if your husband dies Not so!If a spouse passes away the surviving spouse can remain in the home until he/she chooses to sell.
What happens if you receive a lump sum of money? You have prepayment options.
The problems are 1) that new government regulation can limit the ability of a borrower to qualify for other types of financing 2) pensions are not keeping up with expenses and taxes leaving little for debt servicing and many people do not have a large RSP portfolio to draw upon 3)Some people have seen their pensions reduced as companies fold 4) Some people have accessed too much easy credit that the Banks lend without scrutiny via credit cards and lines of credit and their credit rating has deteriorated, not to mention the ability to make payments 4) 93% of seniors want to stay in their home rather than move or relocate for a variety of reasons, so it is not so easy to sell and rent. Many homeowners find themselves sitting on significant equity without a way to access it.
Yes, the Reverse Mortgage is more costly than conventional financing. A line of credit is a better option, as is a variable rate mortgage, but that has to be managed and paid by the homeowner. Compared to Reverse Mortgage, a line of credit floating interest rate interest is approx. 1.79% cheaper. A variable rate mortgage is approx. 2.79% cheaper.
Now, to accomplish the same thing a reverse mortgage does and that is no payments, the borrower has to deduct his future projected payments on the amount borrowed and set that aside for the time frame that they intend to keep the house. Or, they pay the payments that some cannot afford on an already overtaxed income and the interest floats with prime so costs could go up. They may not even qualify under new government guidelines.
You will see Reverse Mortgages advertised for people as young as 55. The sweet spot for getting the most equity from your home runs from age 68-80 and the most equity normally averages 35-40% of the house value and some up to 50%. The older you are the higher amount of equity you can obtain.
Example-two people aged 70 with a 600K home could access somewhere between $200-$240K. Normal mortgage financing could be available up to 65-80% of the value of a home.
Many families today have parents who want to stay in their home, but they are now encountering home care costs and costs in renovating the home. Those costs may fall on their children if they lack income or liquid cash to pay for the renovation costs. They may want to move into a retirement-style home where the monthly costs can be 5-6K per month or more. The RM is an ideal solution for assisting aging parents who cant afford home care, maintenance costs and upkeep but want to remain in their home, without worrying about payments.
You can access an RM where you draw a monthly income to cover costs or a combined mortgage that gives you a lump sum and then a monthly income component.
Some people want to give their children or family an early tax-free inheritance without worrying about payments or cashing in other assets. The Reverse Mortgage works here.
Some people want a better lifestyle and the Reverse Mortgage can give them a non-taxable source of additional income. You can choose a Reverse Mortgage where you receive a monthly payment tax-free.
Some need to eliminate their mortgage and debts. The Reverse Mortgage is an ideal vehicle where no other option exists or where a no payment option is desired.
Some want to use their equity to buy other assets, such as a cottage, investment property, replace an aging vehicle, buy an RV, buy a boat, travel- the choice is yours.
Some have used a Reverse Mortgage to put a small mortgage on a new home that has cost them more than what they sold for or to preserve some of the equity from their sale for other uses.
Some say, sell the house and bank the money. That means you rent, and you sacrifice lifestyle in doing so, not to mention finding suitable accommodation. In our market, it is difficult with a 1% vacancy rate. Then you rent and rents are not cheap, so you use your equity to pay your rent, using up your equity. You have no asset that still has potential to appreciate in value and it wont be like living in your own home.
Some say, sell and buy a smaller home. Possible, but many of the senior downsized styles of homes offer a lot less in amenities and often at the same cost of more unless you are selling a mansion in Toronto and moving to a smaller center. But then, do you want to relocate away from family and friends to accomplish this? Many dont.
Some say the Banks all do Reverse Mortgages-maybe in the US but not in Canada and Reverse mortgages in the US are totally different than they are in Canada.
Some have done some calculations saying Dont Do it because you will lose your house and have nothing left. So here is a real example for you based on the current rate of 6.74% over a 12-year period for a 205K loan on a value of 600K in a house currently. With a 1% value appreciation rate (pretty conservative) in value on the home over 12 years the value of the loan would grow to 454K and the residual equity would still be $222K. You can compare this to someone renting and using their equity to fund their rent payments. Lets assume the same example above and rent of $1600/month. Your equity would last 12.81 years and maybe little longer if you had some interest on your money. In the end, your equity is gone, whereas in a Reverse Mortgage you still have residual equity.
The current regular 5-year fixed mortgage rate is approx. 3.74% so your premium on a Reverse Mortgage is 3.00% over a standard fixed mortgage. A variable rate mortgage is approximately 3.45% floating for a spread of 3.29%. A HELOC approx. 4.45-4.95% and floating, so a spread of 1.79%. You can also opt for a variable rate RM at 6.24%, which is a 2.29% -2.79% spread over a variable.
So, for the many naysayers who say This is a Rip Off This is a Con Job-Not so! It is one solution that can be the ideal solution for many people who may not be as fortunate as you, who are asset rich in their home, but cash flow poor and want a better retirement lifestyle.
Many may not have been as fortunate in their financial planning or have had circumstances that have impacted their health or retirement lifestyle.
So, is it worth the extra cost? For many, it is for the peace of mind and convenience that comes with the benefit of no payments and a way to access the equity in their home that they may not be able to access otherwise. For others, it is a lifestyle choice. It is not for everyone, but it has its place in financing options.
The processing cost of a Reverse Mortgage is from $1795-$2495 depending on the plan, which is deducted from the proceeds. You will have appraisal costs of approximately $300-$500, depending on the location of your property. You will also have a cost for independent legal advice from your lawyer. In a normal mortgage, your costs would be your lawyer and appraisal so that would average around $2000.
In 2018 the growth of RMs reached an 8-year high and RMs to people over 73 grew by 63% year over year, so obviously many people are realizing the value of a Reverse Mortgage in their retirement planning. This is especially so in the age bracket from 73-80.
The best part of a Reverse Mortgage is your qualification is not based on your credit, nor on your income. You only have to have sufficient equity within the allowable guidelines and ensure you have sufficient income to cover your normal living expenses, including utilities, taxes etc.
I will admit I have had personal experience with a Reverse Mortgage in the US and my mothers estate. It was totally different than what is offered in Canada. When I was younger and less experienced, I had some bias based on my perceptions of what a Reverse Mortgage was. I am older and much more experienced, and I see the value to some, not all.
Canadians are traditionally very conservative lenders and the Reverse Mortgage is just that. Fully documented, fully disclosed and no surprises. It is designed for success to accomplish the borrowers goals. It is not designed to make someone lose their home. They are so concerned that borrowers understand this mortgage that they will not let you proceed with it until you have received independent legal advice.
I hope I have given you some helpful insight from our journey into downsizing and from my financing experience with other Boomers.
As Boomers we are cautious and natural skeptics in an age of digital deception so if you are the least bit interested in talking to me about your situation, I am an open book.You can view my background and experience here:wwwbrianmatthey.com.
I am not a voice in a call center. I am a Boomer justlike you who has chosen to work beyond 65 because I love what I do.
I welcome your questions to email@example.com or if you would like to discuss your personal situation, please call me at 613-561-2719. Lets talk-Senior to Senior-Boomer to Boomer
Almost no annual growth for national HPI
The national HPI has grown at a below-inflation rate of 0.5% over the last 12 months, the smallest gain since November 2009. Moreover, the fact that monthly gains are reported for May and June does not mean that the market recently turned the corner. These two months typically register the strongest growth rates in a year. Indeed, the two latest rises were among the weakest in history for months of May and June. If seasonally adjusted, the national HPI would been down in both months this year. However, the weakness is not regionally broad-based. The national HPI was dragged down by 12-month home price declines in Western Canada metropolitan areas (Vancouver, Calgary, Edmonton and Winnipeg) and a tiny increase in Victoria. In Central Canada and in the East, home price growth ranges from decent to strong (left chart). This is consistent with the state of home resale markets. For example, the Vancouver market turned favorable to buyers at the end of last year, while the Toronto market remained balanced and Montreal’s market has never been this tight since 2005. That being said, a rebound in home sales recently occurred in Canada which was also felt in the largest Western metropolitan areas. This should help limit home-price deflation in these areas.
The Teranet–National Bank Composite National House Price Index increased 0.8% in June, a second gain in a row after an eight-month string without a rise.
On a monthly basis, the index rose in 8 of the 11 markets covered: Winnipeg (0.1%), Quebec City (0.3%), Montreal (0.8%), Toronto (1.3%), Halifax (1.5%), Hamilton (+1.6%), Victoria (+2.1%) and Ottawa-Gatineau (+2.2%). The index was down in Calgary (-0.1%) and Vancouver (-0.3%), and flat in Edmonton.
From June 2018 to June 2019, the Composite index rose 0.5%, the smallest 12-month gain in ten years. The HPI declined in Vancouver (-4.9%), Calgary (-3.8%), Edmonton (-2.6%) and Winnipeg (-0.4%). It was up in Victoria (0.3%), Quebec City (1.5%), Halifax (2.7%), Toronto (2.8%), Hamilton (4.8%), Montreal (5.4%) and Ottawa-Gatineau (6.3%).
Source: National Bank Financial Markets; Marc Pinsonneault
NORTHERN STAR (FOR NOW...)
In contrast to the US, Canadian growth is accelerating sharply going into the second quarter, following a solid gain in domestic demand to start the year.
Fast, and accelerating, population growth, and remarkably strong employment growth are providing a solid underpinning to consumer spending and the housing market.
Positive export data suggest that the ongoing strength in domestic demand will be buttressed by net exports in the second quarter, and possibly beyond.
Canadian inflation is at the Bank of Canadas target, in sharp contrast to the US, where it has moved away from the Feds objective. This gives the BoC room to keep rates on hold if inflation remains on target.
Downside risks remain important and are all linked to US-centric developments, with worries about US trade policy ongoing despite the pause with China.
Recent Canadian developments stand in sharp contrast to events in much of the rest of the world. Whereas US growth is clearly decelerating, Canadian growth is on an upswing, with recent indicators pointing to a very sharp rebound from a somewhat sluggish start to the year. Canadians appear to be, for the time being, largely insulated from the broader malaise facing the global economy as consumer and business confidence has improved sharply in recent quarters, owing to strong sales and job creation. While there are a number of factors suggesting that the growth rebound observed will persist through 2020, there is a risk that a divergence between Canadian and US outcomes may not last.
Source: Scotiabank Economics