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Home improvements

August 13, 2021

I was quite surprised earlier this year to discover that, according to the BC government, the value of my property had shot up quite a bit in the past year and was now assessed at $310,000. Interesting.

If you live in Canada you’ve probably seen the ads for reverse mortgages: “Are you over 55? You could get up to 55% of the value of your home from us!” Hmm. Fifty-five percent of the assessed value of my home would leave me with over $100,000 after I paid off the mortgage line of credit debt dumped on me by Mike’s son ten years ago. Sweet! So I made an appointment to talk with the mortgage manager at the credit union who sent the company in question a referral.

Of course, if something seems to be too good to be true, it probably is. Note the words “up to 55%”. Yes, well. If you’re a doddering 88 year old, yes, you can get that amount. If you’re in your sixties and still reasonably fit you can get 30%. Well, that’s not so good, is it? That would only leave me with $50,000 after paying off that debt. I confess I didn’t quite understand how these reverse mortgages work. I was under the impression that they were actually buying your house. And I certainly wasn’t going to sell my house for fifty grand.

Au contraire, as the company’s representative explained the next day. It’s like any other mortgage. When the house is eventually sold they get their money back. Oh, I see.  But wait, there’s more. As the guy further clarified, the company isn’t out to low ball you. Everyone knows the government assessment is less than market value. If I could get an estate agent to come round and confirm what the asking price of the house should be, the reverse mortgage would be based on that. 

Yesterday the lovely realtor recommended by a friend did me a favour and came over to look at the house. Yes, indeed, she confirmed, the house would sell for considerably more. If I were putting it on the market she would recommend an asking price of $430,000. Given the crazy market at the moment, it would probably go for $450,000 or even as high as $490,000! Of course I have no plans to sell the house. As I told her yesterday, they’re going to be carrying me out of here in a box. 

Based on the asking price, after paying off the line of credit and the various fees, I’d still have eighty thousand in the bank. Yes, definitely worth considering. (Ah, yes, the “fees”. Five hundred dollars for an appraisal and nearly $2500 in legal fees. Told the guy that if I had to pay some shyster that much money for old rope I wanted it to be a shyster I actually know. Turns out my lawyer mate is one of the shysters they use on the island, so not quite as annoying.) 

Given that this $80,000 is going to have to cushion me against emergencies for the rest of my life, I won’t be going mad with the money. But, at a minimum, I could buy a new cooker. I could afford to start taking Pilates classes if they ever start up again and I could go crazy and fly business class to London when and if it ever feels safe to travel again. (Okay, I’ve just checked the prices. Maybe not business class. Definitely premium economy.)

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