One of the biggest mental hurdles in the process of getting a reverse mortgage is the fact that you have to have your own lawyer review the deal before you sign it. This entire step is to help you out in three ways – to protect your interests, make sure you actually need a reverse mortgage, and to have the deal reviewed properly just as you would with a real estate lawyer if you were purchasing a home.
Why You Need a Lawyer
The Canadian Home Income Plan (CHIP), the lender that Horizon Equity uses for reverse mortgages, requires you to have independent counsel before lending you money. Even if you want to sign the deal right away you have to have a lawyer who will review the agreement on your behalf.
This lawyer doesn’t represent the lender’s interests at all since the lawyer is retained solely by you. They won’t just review the real estate aspect of the deal, they’ll also make sure it’s compatible with your living benefits and power of attorney arrangements.
Choosing a Lawyer
Your best choice for a lawyer is a real estate lawyer or a lawyer who is familiar with wills and estates. You may already have a lawyer that you’ve used for estate purposes, and this will work for you. If you don’t have a lawyer, call around to friends and family to find someone locally that comes highly recommended. If you’re looking for a new lawyer, concentrate on a lawyer that has experience in handling real estate transactions, preferably as a part of an estate plan.
When to See a Lawyer
Independent legal counsel is the fourth step in getting your reverse mortgage. This means that by the time your lawyer sees it, you will know exactly how much you qualify for, the home will have been appraised, and your application will have been processed with CHIP. How much you pay the lawyer has to do with the amount of time they spend on your deal; this will vary according to how much work you have them do.
If they are just reviewing the documents before you sign, you may be looking at a few hours. If it will be a part of a more complex estate plan, you’ll be looking at more time. Lawyer’s fees vary depending on the area you live in, but most standard real estate transactions will cost between $300 and $800 to review. This amount will be payable separate from your reverse mortgage directly to the lawyer.
If you have any questions about the legal requirements of a reverse mortgage or anything else, give us a call today.