“People are starting to understand what it is now,” he said. “I can say for the last 10 years, people have been saying, ‘But I have all this equity.’ Equity, at one time, was an extremely good word when I first got in the business. Now, it tends to be a bad word unless you’re talking about a reverse mortgage.
“Like I say, it’s an equity mortgage. If you don’t want to make payments, you don’t have to. If you want to make payments so that it doesn’t go into reverse, that’s an option as well.”
As with any mortgage product, Lindsay emphasized the importance of suitability and making sure that a customer is fully aware of the features of the option, what it entails and their obligations under the agreement.
Those so-called “lifetime loans,” the DBRS Morningstar report highlighted, have a bullet repayment that becomes due…