Home sales have grown higher than expected across the country so far in 2013, according to the Canadian Real Estate Association (CREA). The Association is taking this as a signal that the market is set to grow further in 2014. The Home Price Index (HPI) was also up in May 2.3% over May 2012 numbers.
Many pundits have been forecasting doom and gloom for the Canadian housing market due to a dip in sales in the last half of 2012, but the industry group attributes that dip to tighter federal mortgage regulations which made it harder for entry-level buyers to get into the market. If the increasing numbers are any indication, these buyers have been adjusting by saving larger down payments and paying down debt in order to get into a position to purchase a home and are starting to trickle into the market.
What This Means for Retirees
While increased home values generally mean a slight bump in property taxes, the good news for retirees is that it also means that they’ll have more equity in their home to tap into for retirement expenses with a reverse mortgage. This means if you are relying on a reverse mortgage for sudden expenses such as in-home healthcare costs, you may have slightly more money available to you in the near future.
What This Means for Those Planning for Retirement
If you are close to retiring and are considering moving to a new home to downsize or move closer to family, you may want to consider doing it sooner rather than later. While an increase in home equity and demand may mean you’re more likely to sell your home a year from now, the demand may also mean less choice in your desired area.
Should I Wait for Home Equity to Grow Before Getting a Reverse Mortgage?
This is a very good question. While its true that you could get more back on your reverse mortgage if your home’s value rises, interest rates are at an all-time low right now. While Horizon Equity will always try to keep rates as low as possible for our clients, if they increase you could end up paying more interest, even if your home equity is higher. Basically, you should take out a reverse mortgage when you need it, without worrying about factors like an increase in your home’s value. You are only eligible to withdraw a certain percentage of your home’s equity in any case, and that percentage is dependent on a number of factors.
Horizon Equity has helped many seniors tap into their home equity through the CHIP Home Income Plan. Contact us to get more information and to see how much you would qualify for.