Family Conversation Guide: Discussing a Reverse Mortgage

Talking about money with family is hard. Talking about a parent's home equity, retirement finances, and potential inheritance is even harder. This guide gives you a practical framework for having that conversation — along with specific questions to ask a mortgage broker and a checklist to ensure everyone is fully informed before any decisions are made.

Before the Family Conversation

Prepare Yourself

Before sitting down with your parents, take some time to get informed. The worst way to have this conversation is to arrive with assumptions and half-remembered headlines. The best way is to arrive with questions and an open mind.

• Read What Your Parents Are Considering — understand the basics
• Review the inheritance math — so you can discuss real numbers, not fears
• Look at the alternatives — so you can discuss all options honestly
• Check your own assumptions. Are you reacting to what a reverse mortgage actually is, or to what you think it is?

Set the Right Tone

The single most important thing you can do is approach this conversation with respect for your parents' autonomy. They are adults making decisions about their own financial future. Your role is to be supportive and informed — not to approve or deny their choice.

Phrases that help:

• "I want to understand what you are thinking and how I can support you."
• "Can you walk me through what led you to look into this?"
• "What problem are you trying to solve?"
• "I have some questions — not objections — that I would love to discuss."

Phrases that shut the conversation down:

• "You're going to lose the house."
• "That's a scam."
• "What about our inheritance?"
• "I read online that reverse mortgages are terrible."
• "Why don't you just sell and move somewhere cheaper?"

Questions for the Family Discussion

These questions are designed to help everyone understand the situation — not to interrogate your parents. Use them as conversation starters, not a checklist to work through mechanically.

Understanding the Need

• What expenses are creating pressure right now? Is it monthly cash flow, a one-time cost (home repair, medical expense), or debt consolidation?
• How much money do you actually need? Is it a specific amount, or are you looking for ongoing income supplementation?
• How long do you expect to stay in the home? 5 years? 10? Indefinitely?
• Have you considered other options? (HELOC, refinancing, downsizing, government benefits you may not be claiming)

Understanding the Product

• Which lender are you considering? (There are four reverse mortgage lenders in Canada: HomeEquity Bank/CHIP, Equitable Bank, Bloom Finance, and Home Trust — each has different products and terms)
• What interest rate have you been quoted? Fixed or variable?
• What are the setup costs? (Ranges from $995 to $2,995+ depending on lender)
• How much equity are you accessing? What percentage of the home's value?
• Are you taking a lump sum, scheduled advances, or a combination?
• What are the prepayment terms if your situation changes?

Understanding the Long-Term Impact

• What does the loan balance look like in 10, 15, and 20 years?
• What assumptions about home appreciation are being used?
• What happens if one parent passes away or moves to long-term care?
• What are the requirements to keep the mortgage in good standing? (Property taxes, insurance, maintenance)
• Has the broker explained the no-negative-equity guarantee?

Understanding the Alternatives

• Did the broker discuss alternatives? (If they only talked about the reverse mortgage and never mentioned other options, that is a concern)
• Did you try to qualify for a HELOC or conventional refinance first?
• Are you claiming all the government benefits available to you? (GIS, provincial supplements, property tax deferrals in some provinces)

Questions to Ask the Mortgage Broker

If you attend the broker meeting with your parents — or if your parents are comfortable asking these questions themselves — here is what to cover:

About the Broker

1. How many reverse mortgages have you arranged? (Look for experience, not just licensing)
2. Do you have access to all four Canadian reverse mortgage lenders? (A broker with access to only one lender cannot comparison shop for your parents)
3. How are you compensated? (Reverse mortgage broker compensation is typically paid by the lender — your parents should not be paying a broker fee)
4. Did you explore conventional options first? (A responsible broker will check if your parents qualify for lower-cost products before recommending a reverse mortgage)

About the Recommendation

1. Why this specific lender and product? What makes it the best fit for my parents' situation?
2. What is the total cost of borrowing over 10, 15, and 20 years?
3. Can you show me a projection of the loan balance versus the home value over time?
4. What happens at renewal if they choose a fixed-term product? What if rates have gone up?
5. Are there any conditions that could trigger early repayment? (Moving to long-term care for more than a specified period, failing to maintain the property, etc.)
6. What is the process if my parents want to prepay or pay off the loan early?

About Estate Planning

1. When the last surviving borrower passes away, how long does the estate have to repay the loan?
2. Can the heirs refinance the reverse mortgage into a conventional mortgage if they want to keep the home?
3. Is the no-negative-equity guarantee in writing in the loan agreement?
4. What documentation should the estate executor have access to?

The Family Checklist

Before your parents sign anything, make sure these items have been addressed:

A Note About Independent Legal Advice (ILA)

Independent Legal Advice is mandatory for all reverse mortgages in Canada. Before the loan closes, your parents must meet with a lawyer (or notary in Quebec) who:

• Is independent from the lender and the mortgage broker
• Explains the loan terms, risks, and obligations in plain language
• Confirms your parents understand what they are signing
• Represents your parents' interests, not the lender's

This appointment typically costs around $300 and takes 30 to 60 minutes. It is one of the strongest consumer protections in the Canadian reverse mortgage process. Encourage your parents to use this appointment to ask any remaining questions — this lawyer works for them.

For more details, see our dedicated page on Independent Legal Advice.

After the Decision

Whether your parents proceed with a reverse mortgage or choose a different path, a few follow-up steps are helpful:

• Keep a copy of key documents. With your parents' permission, ensure the estate executor or power of attorney has access to the reverse mortgage agreement, the lender's contact information, and the ILA certificate.
• Set a reminder to review. If your parents chose a product with a fixed term (e.g., 5 years), set a reminder to review the options before renewal.
• Stay connected. The best thing you can do for your parents is stay engaged in their well-being — financial and otherwise. A reverse mortgage is one decision. Their quality of life depends on many more.

Additional Resources

• What Your Parents Are Considering — The basics, written for adult children
• Inheritance Impact — The real math over 10, 15, and 20 years
• Step-by-Step Process — From first call to funding
• Independent Legal Advice Explained — What ILA covers and why it matters
• Document Checklist — What you will need to gather