August 22, 2019

Reverse Mortgage Myths Revealed

What benefits do I get from a Reverse Mortgage?

It may not be a good financial condition to have all of your home’s equity locked up,  especially if you are using your income to pay debt or do not have enough income or savings for your retirement. It is important that after retirement you should be able to meet your daily expenses, get yourself or your spouse plan for a vacation, buy a car, renovate your home, or make some investment. A reverse mortgage provides you the absolute financial freedom to enjoy your retirement time without any monthly repayment on the mortgage.

How do I utilize the funds I receive through a Reverse Mortgage?

Many of our  clients have made remarkable improvements in their lifestyle after retirement by using their home equity to:

  • Consolidate all existing debt against other conventional mortgages, credit cards or credit lines.
  • Supplement your income for financial freedom
  • Fund higher education of your children and grandchildren
  • Provide financial help to your family members for purchasing a new property.
  • Improve your home and lifestyle through renovation
  • Go for a vacation to your dream place for enjoying you post-retirement time
  • Buy your own new property or invest in something valuable for you

How much funds can I receive from a Reverse Mortgage?

The loan amount from a reverse mortgage usually depends on your age and the fair market value of your home.  To get an estimate on how much you would quality for, kindly fill out the form available at: online estimate request.

Do I retain the ownership of my home after getting a reverse mortgage ?

Yes! According to the policies of CHIP reverse mortgage, you always retain complete ownership of your home. A reverse mortgage just provides you  funds by unlocking you equity and does not take away your ownership. It’s your home and you may continue to enjoy it anyway you wish. You also have the flexibility to make all or part of the interest payments anytime you wish.

Why does a reverse mortgage plan have a lightly higher rate of interest compared with the conventional mortgage plan?

Unlike in a conventional mortgage plan, with a reverse mortgage, you are not required to pay the interest for as ling as you live in your home. With a conventional mortgage, the bank requires you to make payments every month and they then have the opportunity to reinvest that money to make more money.  With a reverse mortgage, the bank may not receive payment for many years (until you decide to sell the home).

When it comes time to sell the home and pay off the loan, what will be left for me or my estate?

Based on our experience in the past 26 years, home in Canada have continued to appreciate in value at a conservative rate of approximately 6% (as reported by CMHC Corporation).  At this rate, the cost of borrowing accumulated over the years is more than offset by the homes growing equity and most of the homes equity is preserved for you or your estate after it is sold.Please contact us and we will provide you with a financial illustration projection of the money you are left with when you finally sell your home.

What is the impact in case the price of my home in Canada plunges?

Your property is always safe-guarded even though there is a decrease in the home price. CHIP reverse mortgage provides you with a guarantee that if your homes value becomes lower than the mortgage amount, CHIP will assume that loss and you or your estate will never owe more than the home is worth.

When do I have to pay back the reverse mortgage?

The reverse mortgage is only due to be paid back:

  • When you sell your home.
  • In the event of the passing of the final owner of the home.

I own a cottage. Am I eligible to get a reverse mortgage against the cottage?

Yes, definitely! However, approval of a reverse mortgage on your cottage would depend on its location.

What are the fees to set up a CHIP reverse mortgage?

There are three fees involved with a reverse mortgage:

  • The appraisal cost that falls between $200 and $400 depending on the location of your home.
  • Legal fees for your lawyer’s Independent Legal Advice where you will sign all mortgage documents. The fee for the legal advice is usually between $300 and $500.
  • CHIP fee and Closing set up the account and pay for the CHIP legals, registration of the mortgage and you title insurance. This is fee is $1495.

These fees need not be paid out of pocket and rather can be paid using the  amounts from your mortgage loan amount. All of these are one-time payments and therefore does not require you to pay any other ongoing, renewal or other fees till the time you have your reverse mortgage running.

If I plan to move to another home can the CHIP be transferred to the new home?

With the CHIP reverse mortgage program, you have all freedom to sell your home or move when you want. If you plan to move and would like to use the CHIP reverse mortgage to purchase the new home,  we can help you with transitioning your mortgage to your new home. Contact us for more information about this plan.

CHIP Home Income Plan interest may be tax-deductible

  • Deducting the CHIP Home Income Plan interest can offset the income earned by non-registered investments, providing tax-efficient income.
  • Your CHIP Annual Statement clearly indicates the amount of interest you have been charged and that may be eligible as a tax deduction.
  • This deduction may also ensure that the extra income you earn does not affect Old Age Security and Guaranteed Income Supplement government benefits.
  • Be sure to consult a tax advisor to determine how this approach affects your personal situation.

What is a CHIP Canada Home Income Plan Reverse Mortgage?

What is CHIP Canada Home Income Plan?

What if you had the money to pay off debts, help your children buy a home, to travel, or just do more of the things you wanted to do?  CHIP Canada Home Income Plan / Reverse Mortgage Canada could be the solution for you.  It’s the simplest and sensible way to unlock and use your home’s equity and turn it into a steady flow of income or a lump sum cash payment to help you enjoy life on your terms.

CHIP Home Income Plan is a reverse mortgage secured by the equity in your home.

It’s not like a traditional mortgage where you need to make regular monthly payments or qualify with your income.  You do not have to make any payments if you don’t want to – for as long as you or your spouse live in your home.  This is the reason why Canadian’s, like yourself, are taking advantage of this new method of using your home’s equity and reverse mortgage solutions to create more income and start enjoying your retirement.

Reverse Mortgage is designed exclusively for homeowners age 55 and older. This age qualification applies to both you and your spouse.

Receive up to 50% of the appraised value of your home. Based on your age and your spouse, the location and type of home, and current appraised value. Reverse Mortgage Quote to find out how much you could get from your home equity.

Did you want a monthly income cheque or receive a lump sum, it’s Your choice. You have the option of receiving a lump sum advance now or have a portion as a lump sum and the remainder as monthly.

The money is tax-free. It is not added to your taxable income so it doesn’t affect Old Age Security (OAS) or Guaranteed Income Supplement (GIS) government benefits you may receive.

It’s your money! Spend it any way you like... Pay off your existing debts, create more monthly income, renovate your home, purchase a second home of cottage, take an extended vacation, help your children with their home purchases, use it as an investment or just have some extra income and spending cash per month.

No payments are required while you or your spouse live in your home. The full amount only becomes due when your home is sold, or if you move out.

You are always the Owner and have full control of your Home. You will never be asked to pay off your reverse mortgage, never asked to move out. It is your home as it has always been and you keep any continued growth in its equity. If you or your spouse were to pass on, the mortgage is still not payable so there is no financial interruption to your family.  Just continue enjoying your home.

Unlock your home’s equity with CHIP

CHIP Home Income Plan, is Canada’s only provider of reverse mortgages in Canada for seniors. With over 26 years as Canada’s only reverse mortgage lender, CHIP has grown to be a trusted partner with Canadians and all major Canadian Banks.

The CHIP reverse mortgage is the only financial product in Canada that gives you access to your home’s equity while you still own your home and continue to live there worry free for the rest of your life. The CHIP mortgage does not require income or credit to qualify and does not require regular monthly payments.  In fact no payments are ever required, however you can make payments if you wish.

This is the reason people are learning about and choosing CHIP to access their home equity.  You can pay off all existing debt with CHIP and free yourself of monthly debt payments leaving more of your monthly income to live your life on your terms.  CHIP gives you access to your home’s equity to give you more monthly income to live out the rest of your life, in your family home, worry free.

If you are interested in finding out more information about CHIP, please contact us directly, we will be happy to answer your questions and help you with your particular situation.  To reach us, please fill out the quick inquiry form at the top of this page or call us directly at 905-264-9205 ext. 227,  or 416-704-9861, a CHIP expert will be available to answer your questions.

Advantages of Reverse Mortgage

  • While most banks would required proof of income, a CHIP mortgage is not a demand loan and does not require income to qualify.
  • You have the freedom to use the loan amount however you wish. While access your home’s equity, you continue to own and live in your home for as long as you wish and you continue to own the future equity and growth of your home.
  • With a CHIP mortgage you can access up to 50% of your home’s equity.
  • You also have the flexibility to decide on how you would want to receive the your money : a lump sum amount, in multiple breaks, or as a combination of both.
  • The loan amount or cash you receive through a CHIP reverse mortgage is absolutely tax free because you have obtained the loan against the equity in your principal residence.
  • Taking a reverse mortgage does not create a barrier to your government benefits – Old Age Security (OAS) or Guaranteed Income Supplement (GIS)
  • When you decide it is time to sell your home, any growth and new equity appreciation remains with you. The only amount due is the amount borrowed and any unpaid interest accrued.  The mortgage is never due and no payments are ever required for as long as you live in the home or until you decide to sell.
  • You can also utilize the CHIP funds to invest or purchase non-registered investments, to assist provide you with additional monthly income and provide you with an income tax deduction for the cost of borrowing.  It is however recommended that you consult a professional income tax advisor to understand this advantage better.
  • You can utilize the CHIP mortgage to pay off existing debt, renovate your home, buy a second property, provide you with additional monthly income, assist your family with their financial needs, or anything els you can think of to live out your life in your home on your termsThe minimum age requirement is 55 years old and CHIP can unlock up to 50% of your home’s equity.