Reverse Mortgages
Carol Loewen | Chair, ARTA Pension and Financial Wellness Committee
The ARTA Pension and Financial Wellness Committee recently had the
opportunity to attend a presentation on reverse mortgages offered by Dallas
Sleeman (a mortgage agent with On The Mark Mortgages in Edmonton).
The following article summarizes points discussed during the presentation.
Reverse mortgages have become
an item widely advertised on
television as the easy way to
finance a variety of ‘wants’ after
retirement. This financial option
would seem to indicate that
before retirement, money was
perhaps not an issue, and now
it would apparently be easy to
get money from your home to do
things you want to do — travel,
home improvement, paying off
debts, family assistance, or any
other dream for which you may
60 | arta.net
not have funds readily available.
In Canada, at the present time,
there are two banks offering
reverse mortgages: HomeEquity
Bank with the CHIP Reverse
Mortgage and Equitable Bank
with the PATH Home Plan. Both
offer similar programs with the
option of taking a lump sum
advance or a large initial advance
then recurring advances.
The loan amount depends
on two primary factors: age of
the youngest applicant on the
application and the current
value of the home, based on an
appraisal. The equity available
for the reverse mortgage ranges
from 15% to 55% based on age.
The younger you are at the time
of application the less money
you are eligible to receive in
the reverse mortgage. This
precondition is in place to
preserve the remaining equity
of the home for the life
expectancy of the applicant.
In Canada, reverse mortgages