Reverse Mortgages

KNOWLEDGE EXPECTED OF: QAFP® Professionals

Highest Knowledge Level: Awareness

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Define a reverse mortgage. 
  • Identify the purposes for which a reverse mortgage may be used.
  • Identify the providers of reverse mortgages.

KNOWLEDGE EXPECTED OF: CFP® Professionals

Highest Knowledge Level: Evaluation

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Define a reverse mortgage. 
  • Identify the purposes for which a reverse mortgage may be used.
  • Identify the providers of reverse mortgages.
Additional Knowledge Expected of CFP Professionals
  • Explain for whom a reverse mortgage may be suitable.
  • Explain eligibility requirements for a reverse mortgage, such as:
    • Home ownership
    • Age
    • Available equity in property
  • Explain other requirements that may relate to obtaining a reverse mortgage, such as:
    • Independent legal advice (ILA)
    • Lender must hold priority charge on property
  • Explain costs that may be associated with obtaining a reverse mortgage, such as:
    • Appraisal fees
    • Survey fees
    • Legal fees
    • Discharge & disbursement fees
    • Administration fees
    • Title insurance fees
    • GST / HST
    • Environmental assessment fees
    • Registration fees
  • Determine how each of the factors may impact the amount that may be borrowed using a reverse mortgage.
    • Geographic location
    • Type of housing
    • Gender
    • Age
  • Evaluate how each of the factors may impact the amount that may be borrowed using a reverse mortgage.
  • Explain the payment options on a reverse mortgage.
    • As required by the lender
      • On the death of the last owner
      • On the sale of the property
    • Available to the borrower over the mortgage term  
  • Estimate the terms of a reverse mortgage.
  • Determine how each of these factors may impact the suitability of a reverse mortgage: 
    • Credit limit
    • Interest cost
    • Expected variability of interest rates
    • Fees
    • Payment amounts
    • Flexibility of payment schedule
    • Collateral requirements
    • Ongoing need for borrowing capacity
    • Future intentions for property
    • Taxation
  • Evaluate how each of the factors may impact the suitability of a reverse mortgage.
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