Should I use a reverse mortgage to finance my new car purchase?

Posted by on Jul 25, 2022 - Archived under Bad Credit Car Loan Tips

Homeowners in Canada who want to buy a new car might consider using a reverse mortgage to free up some cash.

While these reverse mortgages have grown in popularity, there are some things you should be aware of before making any hasty decisions.

Property prices have plateaued throughout Canada

Since 2008 property prices in Canada have grown dramatically. Over the last two years, during the pandemic, we have seen a seismic shift in the number of Canadians who are buying homes.

Not just in the typical major metropolitan areas like the GTA, Vancouver, and Calgary but even remote areas like Grand Barachois New Brunswick are seeing influxes of new property owners.

These high property valuations are great news for anyone who wants to take equity out of their home, but you need to think long-term.

You’ve worked hard to build equity in your home, and taking on a mortgage, even a reverse one where there are no upfront payments, can impact your net worth over the long term.

What you should do is consider applying for a conventional car loan and preserving the equity in your home.

We are going to show you where to get the best car loans in Canada, so stick around; this won’t take very long.

Credit and income details to bear in mind

There are a few things you will need to bear in mind when shopping for a car loan. 2022 has created a massive amount of anxiety in capital markets.

Lenders are under pressure to generate income by issuing new loans, but the risks of borrowers defaulting are increasing each time the Bank of Canada increases interest rates to slow inflation.

To access the most aggressive interest rates, your credit score should be over 680, the higher the credit score, the more money you are going to save on borrowing costs.

Check your credit score right now by signing up with Credit Karma; it’s free and just takes a minute.

After looking over your credit score, the next thing you have to review is your income. Lenders need to know how much you are making, and they need proof of income.

With a reverse mortgage, you don’t require any proof of income, but you are taking out a mortgage on your home, which carries a unique series of risks.

Where to find the absolute best deal on a car loan anywhere in Canada

If you are looking for the absolute best deal on a car loan anywhere in Canada, you don’t need to travel far.

The best source of car loans can be found at your local car dealership. When you work with a local dealership, they spend time learning about you and your specific needs.

You are not just another number to them; you are a person from the neighborhood, and they want to make you happy.

The dealership can get you approved for the best deals in all of Canada, but you must contact them today.

For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!

Let’s get in touch! 

Dixie Auto Loans