Reverse Mortgages Explained
Do you have parents, grandparents, or other loved ones who could use more income in retirement? We have solutions that can help.
If you or your parents/grandparents are 55 or older (no max age limit), have equity in their home and want to stay in their home for longer, but lack the cash flow they need or would like, CHIP (Canadian Home Income Plan) may be just the solution for them.
CHIP gives them access to up to 50% of the equity in their home, but with NO MONTHLY PAYMENTS REQUIRED for as long as one applicant lives in the home. They can choose to make payments if they like, but no payment is actually required. CHIP gives them the freedom to have some extra cash flow each month or access a sum of money, without the stress of adding a new monthly payment into the budget.
• CHIP is provided by HomEquity Bank. They received schedule 1 bank status in 2009, making them a very attractive option in today’s credit environment. You may be surprised at how customer friendly the program has become.
• There are 1000 people in Canada turning 65 every single day right now. Many cannot afford to quit working because pension income just isn’t enough, and many don’t have enough investments to last with today’s cost of living and longer life expectancy. However, many have homes that appreciated very well, and they can use a portion of that equity to help them with income.
• There is no credit check, no income qualification, and no medical check required. The approval is based only on their age and the equity in their home.
• Title remains fully in their name, and CHIP is just a 1st mortgage. It can be paid out and discharged just like a regular mortgage, and the remaining equity is left for the clients when they sell.
• The money can be used however they like. Pay off debt, renovations, travel, early inheritance, investment, etc.
• The money they qualify for can be taken all at once, in lump sums as needed, as a regular monthly deposit into their account, or a combination. Interest only accrues on what’s been borrowed.
• Rates currently range from 3.99% to 5.69% depending on the term you choose, and set up fees run as low as about $700-$1200 depending on what term you take.
CHIP also guarantees that the amount the client owes will never exceed the fair market value of the home at the time it is sold. After 28 years in business, their average client still has more than 50% of the equity left in the home at the time it is sold. This is because, over time, real estate tends to appreciate at a pace that either keeps up with or exceeds the rate at which the CHIP balance is growing.
As a partner with HomEquity Bank, Rick Bossom is pleased to offer the Canadian Home Income Plan as a solution for today’s senior population looking for more independence and a better quality of life. Please call or email me if you’d like to get more information on this program and I can arrange for a local CHIP expert to meet with you and explain the program in detail.