The benefits of giving money to family with the help of a Reverse Mortgage.
While there are practical reasons for helping your family with an early inheritance, we find the biggest reason is that you get to watch your family benefit from financial assistance.
It’s a rewarding feeling when you know and see that the fruits of your labour are being put to good use.
We often hear that a Reverse Mortgage will take away from your family’s inheritance, however, this is not the case. You can use the tool of a Reverse Mortgage to provide your family with their inheritance and on your terms.
Here are the most common reasons Canadian’s help family while they are still living:
- Tax-Free – the money your family receives will be tax-free. This could save your family from estate tax when you pass away. Please speak with a tax specialist or financial advisor for more details.
- Down payment – help your children or grandchildren with a down payment to purchase a family home. With today’s real estate prices, it is very challenging for a single person or even a couple to save for a down payment.
- Help to start a business – provide your family with funds that would help them to start a business or help to grow an existing one.
- Vacation home – purchase a vacation home for yourself as well as your family to enjoy.
- Medical Expenses – unfortunately, many young families are faced with medical hardships stemming from sickness or an accident. If needed, help them through a challenging time by providing financial relief.
- Education – put your grandchildren through University so they can focus on their studies rather than worrying about how they are going to pay off a student loan.
- Anything you like – the funds you wish to provide your family with can be used for anything you like.
- Equity Guarantee – since the most you can borrow is 55% of the value of your home, it’s highly unlikely that the mortgage will ever be worth more than your home. If for some anomaly, your home sells for less than the mortgage balance owing, Home Equity Bank (largest Reserve Mortgage provider in Canada) will pay the difference.
While the above list are examples of the most common uses of an early inheritance, the funds can be used for anything you like or anything your family needs.
Despite the benefits of giving an early inheritance to family, it is a personal decision that must be made. Will you be more happy to see your family benefit from financial help or do you prefer to help them ‘quietly’ after you are gone?
Before making such an important choice, we recommend speaking with a Tax Specialist, Financial Advisor, Estate Lawyer, and of course GOAT Mortgages. Each professional will share important facts that will empower you to make the best decision for you and your family.
Please contact us today with any questions at 604.334.8993 or toll-free at 1-877-464-1106 or via email at info@goatmortgage.ca.
