{"id":27043,"date":"2022-07-04T13:16:48","date_gmt":"2022-07-04T17:16:48","guid":{"rendered":"https:\/\/www.moneysense.ca\/?p=266790"},"modified":"2022-07-04T13:16:48","modified_gmt":"2022-07-04T17:16:48","slug":"should-i-sell-and-rent-or-get-a-reverse-mortgage","status":"publish","type":"post","link":"https:\/\/www.moneysense.ca\/columns\/ask-a-planner\/should-i-sell-and-rent-or-get-a-reverse-mortgage\/","title":{"rendered":"Should I sell and rent or get a reverse mortgage?"},"content":{"rendered":"
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I have two options: to selI and rent a one-bedroom apartment, probably starting at $2,000 a month, or staying in my home and getting a reverse mortgage. Do you recommend reverse mortgages in spite of high interest? I wouldn\u2019t be eligible for a HELOC as I have no income, other than my pension and what I take out of my RRIF. <\/em><\/p>\n

Most people recoil at the idea of a reverse mortgage. I have been searching for independent advice on this subject, but most advisers have a vested interest in selling me something, i.e. the bank, mortgage brokers, etc. <\/em><\/p>\n

\u2013Laurie<\/em><\/p>\n

Why retirees might consider a reverse mortgage<\/strong><\/h2>\n

I\u2019m sorry to hear you are struggling with this decision, Laurie. I can imagine it is stressful. I will try to walk through the considerations of selling versus a reverse mortgage. <\/p>\n

As an 82-year-old woman, you have a 50% probability of living another 10 years. So, I think you need to consider the lifestyle and financial implications of living well into your 90s. <\/p>\n

Selling a home and renting as a senior<\/strong><\/h2>\n

If you sell your home, you will pay a commission to the real estate agents that could total 5% or more of your home value. You will also have legal fees, moving costs, as well as the inconvenience of having to find a new home, pack and move. Say your condo is worth $500,000. A 5% real estate commission plus sales tax could be about $28,000. Legal fees and moving costs could push your all-in selling costs over $30,000. But then you will have plenty of money in the bank and could invest the proceeds and stop worrying about cash flow. <\/p>\n

You could increase your spending by about $2,500 per month, indexed to inflation, and you will probably not run out of money even if you lived to 100. This could cover the rent you estimate at $2,000 per month.<\/p>\n

If you move into a rental condo, you run the risk of your landlord selling your condo, in which case, you may need to move out on relatively short notice. An apartment or a retirement home may be a safer option to avoid another move. I can imagine moving once in your 80s could be stressful enough\u2014let alone twice.<\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

I have two options: to selI and rent a one-bedroom apartment, probably starting at $2,000 a month, or staying in my home and getting a reverse mortgage. Do you recommend reverse mortgages in spite...<\/p>\n","protected":false},"author":1,"featured_media":27045,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[5,10,11],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/27043"}],"collection":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/comments?post=27043"}],"version-history":[{"count":0,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/27043\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/media?parent=27043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/categories?post=27043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/tags?post=27043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}