Reverse mortgages have recently surged in popularity among Canadians, especially retirees looking to tap home equity. As the market grows, new entrants like Bloom emerge as disruptors worth considering alongside established lenders. This in-depth 2024 review provides a comprehensive look at Bloom Reverse mortgages.
Overview of Bloom Financial Company
- Established: 2011
- Headquartered: Toronto
- Service: Reverse Mortgage
Founded in 2021 and headquartered in Toronto, Bloom is a relative newcomer in Canada’s reverse mortgage industry. However, the fintech company has rapidly made a name for itself due to an innovative digital-first business model and focus on customer experience.
Bloom currently operates offices in Toronto, Vancouver, and Calgary, underwriting reverse mortgages in Ontario, British Columbia, and Alberta. The company has expressed plans to continue expanding its availability across Canada in the coming years.
As the first fully digital lender in the reverse mortgage space, Bloom has leveraged technology to create a streamlined, transparent lending process many describe as a breath of fresh air.
Although Bloom does not yet have the scale or national presence of competitors like HomeEquity Bank, they have utilized competitive pricing, product design and outstanding service to carve out an impressive market share in a short timeframe.
How Bloom Reverse Mortgage Works?
A Bloom reverse mortgage allows Canadian homeowners aged 55+ to access a portion of their home equity to generate supplemental retirement income while continuing to live in their house.
A Bloom reverse mortgage provides homeowners a one-time payout of up to 55% of the appraised property value. The payout amount depends on the borrower’s age and prevailing interest rates. Older borrowers qualify for higher payouts.
With no restrictions, the approved payout funds can be used entirely as the borrower desires. Typical uses include paying off debts, home renovations, healthcare costs, travel and general retirement living expenses.
Unlike traditional mortgages, a Bloom reverse mortgage does not require ongoing monthly payments. Interest accumulates over time in the loan balance and the original principal.
Repayment of the loan only becomes due when the last remaining borrower sells the home, moves out permanently or passes away. At repayment time, sale proceeds or mortgage refinancing are typically used to cover the balance owed.
Throughout the process, borrowers retain full title and ownership of their home. Bloom does not take any stake in the property itself.
Bloom Reverse Mortgage Rates and Fees
Rates and costs are key factors when comparing lenders. Here is a detailed overview of Bloom’s current pricing:
Bloom Reverse Mortgage Rates
Bloom offers competitive fixed interest rates for set terms between 1 and 5 years.
| Term | Bloom Rates | Equitable Rates | CHIP Rates |
|---|---|---|---|
| 1-year Fixed | 3.99% | 8.09% | 8.19% |
| 2-year Fixed | 4.25% | 7.49% | 7.19% |
| 3-year Fixed | 4.75% | 6.89% | – |
| 4-year Fixed | 5.15% | – | – |
| 5-year Fixed | 5.25% | 6.49% | 6.69% |
Rates are subject to change when renewing terms after the initial fixed period ends. Pricing at renewal will depend on market conditions at the time.
Bloom Reverse Mortgage Fees
- Processing fee: $1,495 – covers admin costs for underwriting
- Appraisal fee: $325 – pays for home value assessment
- Independent legal advice: $300 – $500 – for your lawyer
- Account set-up fees: $75 – $150 – if requesting tax/insurance account
Bloom finances all fees into the overall loan amount. There are no upfront out-of-pocket costs for borrowers.
Unique Features of Bloom Reverse Mortgages
Bloom stands out from Canada’s reverse mortgage industry competitors through its innovative product features and borrower-focused approach.
Bloom Credit Card
The Bloom Credit Card provides flexibility in accessing your approved funds. Borrowers can continually withdraw leftover amounts as needed rather than in a lump sum.
You simply use the card to tap available funds from your reverse mortgage. Purchases and withdrawals accrue interest at the same competitive mortgage rate.
This avoids having leftover approved amounts sit idle while you pay higher interest on traditional credit cards or loans. The Bloom Card offers lower-cost access on the go.
Home Equity Guarantee
Bloom’s Home Equity Guarantee contractually assures your reverse mortgage balance will never exceed the current market value of your property.
Many borrowers worry that accruing interest will eventually put them “underwater” on the loan. This guarantee gives peace of mind that the debt cannot surpass home equity.
To maintain the guarantee, you must keep up with property taxes, maintenance, and insurance on the home. This protects the asset backing the loan.
Digital Process
From funding applications and beyond, Bloom provides an intuitive online platform for reverse mortgages.
Apply online at your convenience, securely upload documents, receive e-signed disclosures, track progress 24/7, and access your account online anytime.
The streamlined digital process reduces paperwork and makes getting a reverse mortgage much smoother.
Responsive Support
Bloom has built a reputation for providing attentive customer support before, during, and after securing a reverse mortgage.
Borrowers have access to dedicated Mortgage Specialists who can guide them through education, application, and responsible use of funds after approval.
The helpful support and advice sets Bloom apart from competitors in prioritizing customer needs.
These innovative features and services help maximize value for Bloom reverse mortgage borrowers.
How does Bloom Reverse Mortgage Compare to Other Top Lenders?
In comparison with major reverse mortgage lenders like Equitable Bank and HomeEquity Bank, Bloom offers the most competitive interest rates and fees. HomeEquity Bank, through its CHIP brand, has significantly higher interest rates and fees.
Bloom’s online application process is fast and straightforward for borrowers. It also provides intuitive online tools and responsive customer service.
Unique features like the Bloom Credit Card, which provides accessible funds, are innovations not seen by competitors. Bloom’s digital-first focus enhances the overall user experience.
While the advantages are clear, there are also important factors to consider:
- Rates are subject to increase after fixed terms end
- Home equity guarantee contingent on meeting obligations
- Loan balance due upon move-out or passing
- Limited to 55% of home value
- Not available nationwide currently
- There is less product variety than some lenders
Make sure to think through how well a reverse mortgage aligns with your specific financial situation and retirement needs. Seek expert advice to inform your decision.
In summary, Bloom excels based on its competitive pricing, innovation, great technology, and customer service focus. However, the larger incumbent providers have advantages in terms of operating history, flexibility, and nationwide availability that may suit some borrowers better, depending on their specific circumstances and needs. There are merits to evaluating all options.
| Lender | Bloom | Equitable | HomeEquity |
|---|---|---|---|
| Years in Business | 3 | 10+ | 30+ |
| Rates | Very competitive | Competitive | Higher |
| Fees | Lower | Competitive | Higher |
| Products | Streamlined | Variety | Most variety |
| Availability | ON, BC, AB | Nationwide | Nationwide |
| Application | Fast, online | Online capable | Slower, paper-based |
| Customer Service | Excellent | Good | Good |
Discover other Top Best Reverse Mortgage Lenders in Canada:
- CHIP Reverse Mortgage
- Equitable Reverse Mortgage
- Fraction Reverse Mortgage
How you Qualified for a Bloom Reverse Mortgage?
Bloom has flexible eligibility requirements compared to traditional mortgages. Here is an overview of key qualifications:
- Aged 55 or older
- Own home valued at $200k+ that is the primary residence
- Minimum 55% home equity
- Located in ON, BC or AB
The maximum payout amount will depend on your age, home value and prevailing rates. Bloom offers a free pre-qualification tool to estimate potential borrowing power.
Documentation Needed:
- Photo ID confirming age
- Proof of home ownership
- The most recent property tax bill
- Home insurance documents
Credit Requirements:
- Good credit is not mandatory
- No minimum credit score
- Some restrictions may apply
The maximum payout amount depends on age, home value, and interest rates. Bloom offers a free pre-qualification tool to estimate potential borrowing power.
Applying for a Bloom Reverse Mortgage
Applying for a Bloom reverse mortgage is relatively straightforward, following four simple steps:
1. Calculate Your Home Equity
The process starts by determining how much of your home equity you can unlock with a Bloom reverse mortgage. The company offers a no-cost online calculator to help you estimate the amount you may qualify to access based on your age, home value, and other factors.
2. Estimate your loan
After using the calculator, speak with a Bloom Mortgage Specialist or a mortgage broker who will review your situation and provide a personalized loan estimate outlining proposed terms and interest rates. Reverse mortgages are highly regulated, allowing you to access up to 55% of your equity.
3. Submit an Application
You can then complete the application online or over the phone. Since you already have built up equity in your home, the application process is more streamlined than a traditional mortgage.
4. Receive a decision
Bloom’s underwriting team will rapidly review your application, and a customer representative will inform you once a final decision has been made.
5. Finalize with legal counsel
The final step requires consulting with an independent lawyer, who cannot be affiliated with Bloom, to review terms and provide mandatory counsel. After signing, funds are deposited into your specified bank account.
The application process with Bloom is designed to be simple, fast and transparent. In just a few weeks, you can access your hard-earned home equity.
Is Bloom Reverse Mortgage a Right Choice for You?
Although a relatively new entrant, Bloom has quickly emerged as a top reverse mortgage provider with its competitive rates, innovative features, and outstanding service. If you’re a Canadian retiree considering accessing your home equity, Bloom deserves strong consideration.
Unlocking your equity can provide retirement security and flexibility. Don’t leave this resource untapped – explore your reverse mortgage options today.
Ready to learn more? Connect with our mortgage broker at Best Mortgage Online for expert advice on finding the best solution for your needs.
FAQs
What are the requirements to qualify for a Bloom reverse mortgage?
To qualify you must be 55+, own your home in Canada valued at $200k+, and have at least 55%
Do I need good credit to be qualified for a Bloom reverse mortgage?
No, Good credit is not required.
How much money can I get from a Bloom reverse mortgage?
Bloom allows you to access up to 55% of your home's appraised value. The exact amount depends on your age, home value, and current interest rates.
Does Bloom take ownership of my house with a reverse mortgage?
No, you keep full ownership of your home. Bloom does not take any stake in the property itself.
How quickly can I get funds from a Bloom reverse mortgage?
You can receive funds in your bank account within 2-4 weeks of completing the application process.
Can I lose my house with a Bloom reverse mortgage?
No, a Bloom reverse mortgage allows you to remain safely in your home. You only have to move out if you choose to sell the property or pass away.
Can I still get a Bloom reverse mortgage if I have a current mortgage?
Yes, the funds from a Bloom reverse mortgage can be used to pay off an existing mortgage if desired.
What are the repayment options for a Bloom reverse mortgage?
When the loan becomes due, you can repay the balance with sale proceeds, refinance into a traditional mortgage, or use other assets if available.
Is a reverse mortgage from Bloom right for me?
Consider your financial situation and retirement plans. Consult a professional advisor to determine if it aligns with your needs.