Saving for retirement is a major component of any financial plan. However, even the best intentions and diligent savings can’t accommodate the unknown. From the rising cost of goods to unexpected home repairs, having access to funds can prepare retirees for potential expenses. To address this issue, a variety of companies offer services to utilize home equity as a financial resource. Bloom is a business that focuses on financial health for homeowners moving into retirement. Of course, this is not the only business offering these services. To determine which company is right for your needs, research is paramount. In this piece, we break down the details of Bloom, so you can determine if it is the best approach for your household.
Who Is Bloom?
A Canadian business that opened in 2019, Bloom positions itself as a company that uses technology to offer financial services to those over the age of 55 who reside in the province of Ontario. Aiming its focus on customer service, Bloom offers ways to simplify finances for those pursuing retirement. It operates with a belief that retirement ought to be the dessert at the end of a meal – something to savour and experience with joy. Customizing its services for homeowners, Bloom offers various reverse mortgages to free up funds for retirees.
What Does Bloom Offer?
Bloom is a reverse mortgage company; a business that helps homeowners take the equity in their property and leverage it to get a steady income. While pensions and securities come through in retirement, many only take effect when the retiree reaches a certain age. Bloom offers reverse mortgage services to those 55 and older.
A reverse mortgage is also called an equity release – a financial tool that allows homeowners to borrow as much as 55 percent of their home’s value (while retaining ownership). The amount comes due when the retiree moves out of the home, sells the property, or the final borrower passes away.
The proceeds of the reverse mortgage can go toward anything you choose. Some opt to explore the world through travel and others use it for general expenses. Bloom notes that the funds can go toward any purpose, with mentions of living inheritances to home renovation projects.
Bloom Reverse Mortgage Features
Reverse mortgages offered through Bloom follow the standard procedures, meaning there are certain criteria necessary to unlock the full 55 percent of the home’s value. After the initial process of determining both the value and the amount to leverage, the next steps are very straightforward.
So long as the borrower chooses to remain in the home, there are no requisite payments to Bloom. This assumes that the homeowner maintains all other obligations such as insurance and property taxes. During this time, the borrower can use the funds to pay for anything they choose. Among the features that Bloom offers are:
- Low rates: Bloom supplies a fixed interest rate over a full five years. This interest amount is locked in for a set period, adding to the balance Bloom collects. Unlike variable interest rates which are subject to increase, this setup means you always know how much home equity you are leveraging.
- Limited income requirements: The loan doesn’t have regular payments and keeps the income threshold to qualify low. This makes the service available to more Canadians.
- Market value guarantee: Loans from Bloom ensure that you never owe an amount higher than the market value of your property. This feature diminishes one of the key risks of taking out a reverse mortgage.
By taking steps to mitigate the risk associated with a reverse mortgage, Bloom aims to set itself apart from other lenders. The structure of these loans is to allow for maximum enjoyment during retirement, without sacrificing the home you worked so hard for.
How To Apply For A Reverse Mortgage With Bloom?
Applying for a reverse mortgage through this company is quite straightforward, following four simple steps:
- Get a loan estimate: Reverse mortgages are highly regulated, where you can unlock up to 55 percent, though the actual amount varies. Bloom offers a no-cost calculator, to help you get a picture of the amount you can receive through a loan.
- Fill out the application: Either over the phone or complete an online form to apply for the loan. Unlike a mortgage, you already have the equity in your home. As a result, the application is more straightforward.
- Receive a decision: A customer representative for Bloom will review your application and inform you as soon as the company reaches a decision.
- Unlock your home equity: The final step in the process does require independent legal counsel (ILC) to finish the arrangement. The lawyer cannot be affiliated with Bloom, lest there be a conflict of interest. With the consultation of this professional, you complete the paperwork, and the funds get deposited directly into your account.
Eligibility Requirements For a Bloom Reverse Mortgage
In order to qualify, you must be a homeowner over the age of 55 whose property is in the province of Ontario. You must also reside in that property on a permanent basis. There are several criteria for a Bloom loan; so, to determine whether you are eligible, it is best to contact the company directly.
Provided you qualify for the reverse mortgage, you can be eligible for as much as 55 percent of the value of your home, at the time of borrowing. Bloom offers a calculating service to help you determine how much you may qualify for. It ultimately depends on your age, your home’s appraisal, and the lender.
In order to make the service accessible to as many people as possible, Bloom offers options for homeowners with all sorts of credit histories.
Bloom Fees And Rates
Bloom’s fees consist of processing costs and appraisal fees. They are broken down as follows:
Fees
Though these are deducted directly from the mortgage, so there are no out-of-pocket expenses. The appraisal cost is a flat rate of $450, the proceed of which go towards an appraisal professional to determine the value of your home. Processing fees go toward Bloom’s expenses, including legal fees and mortgage registration. It rings in at a flat rate of $1,200.
Rates
Bloom’s rates are equally straightforward. The loan has a fixed rate of 4.99% for a full five years, provided the home falls in a certain area and qualifies for Bloom’s services. This company notes caveats to this standard, including the ability to change, withdraw, or extend the offering without notice. Compounding semi-annually, a fixed rate set to such a low amount offers desirable value to homeowners.
The reverse mortgages through Bloom feature an annual percentage rate of 5.21% as an example. It is the estimate of the price of borrowing for five years, expressed as an annual percentage. The amount is calculated based on $150,000 mortgaged and is meant to include the fees noted above. Both the APR and the fixed-rate are effective at the time of writing.
Bloom Overview
Bloom is designed to be straightforward, offering one single service, the reverse mortgage. These free up funds for the homeowner while only leveraging a portion of the equity in the home. It follows a simple application procedure and enables those who are no longer working to still profit from their assets in the form of liquid cash. Understanding how the company works can help you determine if it is the best approach for your household.
| Home Equity | Access up to 55% of your home value |
| Fixed-Rate | – Offers 1-to-5-year fixed-rate terms – Interest rates vary between 3.94% – 5.35% |
| Payments | No payments are required until you move or pass away |
| Requirements | – You live in Ontario – You are over the age of 55 – You have equity in your home |
| Home Value | Due to Bloomfin’s Home Equity Guarantee, you’ll never owe more than your home’s market value |
Home Equity
With Bloomfin you can access up to 55% of your home value. To find out how much of your home’s equity you can unlock with Bloomfin, you can get an estimate here.
Fixed-Rate
For the service of the reverse mortgage loan, you can more easily plan for the future. Though the company agreement includes a caveat that it can change without notice, in order to remain competitive, lenders like Bloom aim for competitive interest rates.
Payments
So long as you remain in the home, you do not need to make any payments on the loan. This assumes that you keep up to date with your responsibilities including property tax and insurance. When you leave the home, whether as a result of moving or death, the loan becomes due and payable. The vast majority of borrowers use the home sale proceeds to repay it. Another popular alternative is refinancing with an additional mortgage.
Home Value
Bloom offers a home equity guarantee that ensures the balance of your loan never exceeds the value of the home. It is to ensure that you or those who you care for are not left with expenses when the bill comes due.
Bloom FAQs
Do I still own my home with a reverse mortgage?
What happens if I die with a reverse mortgage?
Can my house be taken away?
What happens if I owe more than my house is worth?
Is Bloom available across Canada?
Final Notes
Reverse mortgages present an opportunity to liquidate a part of your home equity without losing access to the property itself. As with any other financial service, there is a measure of risk associated with taking out a home equity loan, even with a guarantee.
The Bloom reverse mortgage loans are designed to give Ontario homeowners over the age of 55 a chance to enjoy retirement while still having their home to live in and retaining ownership of it. For many, this type of service can offer beneficial access to funds. Be sure that the arrangement aligns with your plans and that you fully understand the agreement.
The information in this article does not, and is not intended to, function as legal advice. All content offered through this piece is for general informational use and in no way constitutes legal counsel.
