Retirement is no longer going out quietly
The world people are retiring into today is a lot different than it was 25 years ago when their parents started retiring. For starters, living out your golden years in quiet isn't exactly the goal any longer. That makes sense - we're living a lot longer, and a lot healthier than our parents and grandparents did when they retired in the 20th century. That means people over 50 are more active than ever. They're playing sports more and are more involved than ever in their communities, and with their families and friends. Retirement is a lot different when you can expect to live another three decades after you retire.
Using your Equity as More than an Asset.
Another big difference is the difference is the average retired person's net worth. Before the 2000's, the average Canadian home wasn't worth over 750,000. Now more than ever, a huge part of the average Canadian's net worth is tied up in their home.
Due in-part to home values, most people are going into retirement with a much larger net worth than their parents. Despite this though, most Canadians are still relying on the conventional wisdom of their parents to aim to retire mortgage free. That made sense when your home was only worth 100,000. It makes a lot less sense today. Luckily, a rapidly growing number of Canadians are realizing that using their home equity as a part of their retirement planning makes a lot more sense than leaving it locked away and unused.
A few ways people are doing this is
- Reverse mortgages to convert their existing mortgage into a payment free option
- Accessing existing equity to buy second homes in warmer destinations
- Use equity to renovate their home to make it suitable to stay in for longer
- Accessing some equity as a lump sum, then receiving regular payments to supplement pension income.
Income Qualifying? What happened to customer loyalty?!
More and more people are finding out that their bank they've been loyal to since before cell phones just doesn't have any loyalty to them. When they're going to get a short bridge loan as they downsize, they're finding out that their bank won't give them a mortgage despite plenty of equity and having a perfect record of paying back loans their entire lives.
No worries! Tekamar Mortgages has access to mortgage products that lets you buy that downsize home before you even have an accepted offer on your current home. We've also got access to a number of mortgage products that only care about your equity, not your income.
Mortgage laws and products have changed and it's our job to keep up with them. Give us a call and see if we can help you where your bank might just fall short.